Comparisonsmaster
Don’t Make These Mistakes While Getting a Loan
Related Topics (Sponsored Ads):
Before you take a loan however, there is a very important question to answer – do you really need the loan? Is the purpose of the loan important or pressing enough? Perhaps there is another source for the funds – such as savings or shares of stocks? Even if you feel the loan is necessary and there is no alternative, then you should make sure that you don’t make one of the following common mistakes.
Before you take a loan however, there is a very important question to answer – do you really need the loan? Is the purpose of the loan important or pressing enough? Perhaps there is another source for the funds – such as savings or shares of stocks? Even if you feel the loan is necessary and there is no alternative, then you should make sure that you don’t make one of the following common mistakes.
Shop Around For The Best Loan
Getting a loan is akin to ‘buying money’, therefore you should shop around for one like you do for a major purchase. Make sure the lender is reputable and regulated by consumer protection laws. Make sure the lender has accessible customer service regarding your account, including being able to talk to a human being and not just a computer.
See if you can get pre-qualified, so that you don’t submit an official application and then get rejected. Every time you apply for a loan, it’s reported to the credit bureaus and can negatively impact your credit score. Therefore, don’t submit multiple loan applications at one time – choose and work with the best lender.
Don't Falsify Your Financial Facts and Figures
Virtually every potential lender will do a background check on you. If you falsify your income, assets, employment history or other requested information on your application, it will have consequences. If they find out before giving you the loan, you will be rejected and be “black balled” by that lender. If they find out after giving you the loan, they can legally demand immediate full repayment and even press fraud charges against you.
Fully Understand All the Terms and Conditions
In addition to the loan amount and the required monthly payment, you should be fully aware of the various terms of the loan you are applying for:
– Are there any kind of application or other kinds of fees?
– What is the interest rate? Is it fair and competitive with other lenders?
– Can you pay-off the loan early? Is there a financial penalty for doing so?
– Is there any grace period regarding late payments? What exactly are the consequences for late payments?
– Is the loan a full personal (signature) loan or is there some sort of collateral involved (like your bank account or home)?
Don't Overpay Interest
The longer you get to pay the loan back, the smaller your monthly payment should be. However, the higher the amount of payments, the higher the total amount of interest you will pay. Therefore, you should choose the smallest amount of payments that you can afford.
Also, see if the interest on the loan is calculated in a way that will save you interest if you make more than one payment per month, when you are able to do so. Of course, be careful that this doesn’t trigger an early pay-off penalty.
