Things to Cover Before Applying for a Loan

No-one is super-excited about having to get a loan, but doing so is often the only way of achieving your goal, regardless of whether it’s a business or a personal decision. Unless this is your profession, you probably know little or nothing about loans so, in order to avoid causing financial dents in your budget, we’ve come up with a list of things that you need to know before applying.
Shopping around before taking out a personal loan should be the first item of your agenda. The main thing to keep an eye on when “window shopping” for loans is the APR – the annual percentage rate, because it tells the real cost of taking out a loan.
Payment Protection Insurance
When it comes to shopping around, the PPI should be right next to the APR on your agenda. The very point of payment protection insurance is covering your monthly credit card or loan payments in case of being unable to meet the deadlines for a variety of potential reasons. The cheapest deal should be your aim. Additionally, avoid buying a policy directly from your lender – this is a more expensive alternative than opting for standalone providers.
Think About Taking More than You Might Need
While this may sound counter-intuitive, keep in mind that interest rates drop as the size of the loan increases. Now, this is not to say that you should go crazy here by taking out a loan twice as much as you might need, but borrowing slightly more than you planned on doing can actually save you a buck or two.
Careful with the Number of Loans
Applying for loans leaves a certain “footprint” on your credit record – something that lenders like to keep an eye on before approving a loan. The larger this footprint is, the less likely you are to be approved for a loan, seeing as how this makes you look desperate.
Think It Through
Getting a loan should pretty much be your last resort. Although there is no shame in lending money, there are many forms of credit that might turn out significantly smarter solutions, such as using a credit card with a 0% introductory offer on purchase –this way you get to spread the cost of large investments and purchases.
Keep Your Credit Rating in Mind
Before doing anything related to lending money, always check your credit rating. If it’s in good shape, there might be a less expensive deal on the table for you.
Consult Professionals
Checking with the experts is always advisable, especially when there’s money at stake. Investing a bit more might get you great financial advice which, in turn, will save you a whole lot of money further down the line. On the other hand, some companies such as Clean Credit offer obligation-free assessments, which is definitely a smart way to go.
Borrowed Money Isn’t Your Regular Money
When it comes to personal loans, there aren’t many limits on how you can use the money – the lenders are mostly concerned about the how and whether you are planning to pay them back. However, there are lenders who will allow you to spend money solely for the purposes that you have stated in your loan application. This is where shopping around kicks in once again – you need to get to know your lender in fine detail.
Getting a loan isn’t the end of the world, even if you are pretty desperate about your financial situation. However, browsing for the best fitting lenders is definitely smart. Keep an eye on your credit rating and never refrain from consulting professionals!

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