Sometimes at some part of our lives we face
financial problems. You may fall short of cash to meet our needs and wants like
paying our monthly bills, medical bills, buying a car or home. To fulfil our needs
and wants we look for sources which offer financial support. Loans are one of
the best sources which assist you financially to achieve your goal. However you
need to be very careful and consider certain points when choosing which loans
to go for.
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First of all determine which type of loan
will suit your needs. If you require small amounts of money then you can go for
short term loans. If you need instant cash then you can opt for paydayloans. If you want to finance for a new home then you can opt for long
term mortgage loans. Taking a long term loan for smaller requirements does not
make a sense. So, determine your needs and choose accordingly.
Consider the loans with lower interest
rates. Don’t ever consider loans with high interest rates for a small advantage
that they are easily approved. If you do so, you will end up paying much more
on top of what you owe. Invest some time and effort on shopping around for the
best deal.
Banks and lenders use different types of
terminology in calculating the interest rate. So, before considering a
particular lender, it is advisable to clearly know the terminology used to
calculate the interest rate of the loan.
Check out the additional rates imposed on
the borrower. Some banks and financial institutions collect about 2% on the
total loan amount as the processing and administrative charges. If the charges
imposed are high then the loan burden increases. Some lenders give exemption on
these charges. So consider such lenders to reduce your loan burden.
Make sure that the lender is deciding your
monthly instalment amount of the loan based on your income. If the lender
decides a high monthly payment then you may not be able to pay. If the EMI is
less than the duration of the loan term extends and you end up paying much more
in the form of interest. So, make sure that the lender determines reasonable
monthly payments which allow you to keep up without much difficulty.
Some banks collect charges when you repay
the loan amount prior to its due date. They charge about 5% on the loan amount
as prepayment charges. So, it is better to find out these things before you
apply for the loan.
Ensure that all the details are mentioned
in the agreement. Don’t accept the details or promises which are given orally.
Today most lenders are present online. With some research online you can find
the best lender available to you.
