So, are you interested in getting a loan?
Here are some easy tips to help you make an educated decision about what kind to get and from whom to get it.
Ask yourself first: do you really need it?
Without it, can you manage? Is this frivolous for something, like a holiday? Can you get the money by other means: part-time jobs, selling an asset from a relative?
If you can stop it, don’t put a monkey on your back.
A loan varies in accordance with:
The borrowed amount;
The rate of interest;
A rate sort (fixed or variable);
The word (time of repayment in months or years);
(down payment) deposit;
(broker, origination, prepayment, etc.) related fees;
Insurance that the lender needs.
You buy money for more than the lender’s amount. Just easy.
It’s a mistake to think just about the interest rate; arrangement costs and prepayment penalties are also to be addressed. There is a pre-payment charge on certain ‘no-fee’ credit lines. This is how they earn their money from brokers and lenders. Before making a decision, work out the overall cost of your loan.
Keep your credit line as low as possible to ensure you get the best terms. Loan officers appear to list as a liability the total line of credit that is available.
Before the due date, pay off small debts. Cancel credit cards which you do not need. When determining which cards to carry, remember their interest rates and fees.
Don’t put your house at risk by having a home equity credit line to pay off your credit-card loans if your spending is out of reach.
Shop for prices when there’s a quiet market. Rates shift day by day, so compare lenders with each other. The quotes you are getting should all be from the same period of time.
Send a neat application form; it shows you’re productive and business-like. A human being can read and interpret it; appearances count.
Charge up-front fees only to well-known institutions, or those highly recommended by trustworthy sources.
Without reading them, don’t sign papers. Check the papers you’ll be signing as soon as possible before you close the contract, to make sure you understand them, so you won’t have to sign them in a hurry.
Keep a copy of any loan cheque you write. Make sure you have the full name of the person you are referring to when you call your lender about your loan. Make it a note. You could be dealing with a broad bureaucracy, and this discussion may need to be returned to later.
Do not send correspondence to the same address you send your payment if you find yourself in a conflict with a lender. You have the decision-makers to contend with, not the account clerks.