So you’ve started reading up on loans, you’re getting the hang of it, and quite frankly, you’re already considering a future in banking! Or, you just want to get on with it, take out a loan and reach your financial goals.
However, you’re not the hasty type, and you want to consider all the ins and outs before taking the plunge. Perhaps you urgently need to cover unexpected costs, consolidate your credit card debt, or need to purchase a once-off big ticket item without breaking the bank.
People get loans for many different reasons, and they come in handy during times of pressing need and can lift the load of immediate financial pressure. It is important to know what questions to ask yourself and the lender so you can know what is best for your situation. Read on for the top 3 important things to take into consideration before applying for a loan:
- Your credit score - You should be concerned with this factor before applying for a loan as it influences your ability to get credit and it impacts your long-term costs. Don’t waste your time by applying for loans that you know you are not eligible for as you can hurt your credit score in the application process. There is no point in applying for a loan that you know you most likely won’t qualify for. If you suspect that your credit score might be a bit too low, read this article on powerful steps to improve your credit score.
- Application process and fees - It is vital to know what you need to provide the institution with, the length of the application process, and when the funds would be in your account upon approval, especially when your need is very urgent. You should also be aware of any fees that you may need to pay before applying so that you can compare loans from different lenders to find the best arrangement.
- Limitations - Always ask the lender if there are any limitations to the loan such as the use of the funds. Student, car and mortgage loans are mostly limited in this way. For most personal loans, you can use the cash for any purpose. If you gather extra cash or jiggle your way into flexibility in your budget during your repayment period, and you want to pay off the loan faster, make sure of any incoming penalty fees the lender might charge you. It is wise to avoid loans that you cannot pay off faster if wanted!
At Fincheck, we look at loans realistically, and we know that they can be of great help in reaching your financial goals if put to use properly. Here’s to you on staying on top of our debt.