Knowing the world of lending is not easy, as the offer of loans in the market is very wide. If you need to deal with your financial situation, you should first orientate yourself in the main parameters of loans.
Do you want know some advice?
Here are nine advices for loans that may be helpful in choosing them.
Do I really need this loan?
The very basic rule is that the life of the goods or services for which we borrow should be longer than the repayment period. It is not wise to borrow 2 and a half thousand dollars for a luxury holiday, for example. After a few days you are back home and then you have to pay the installments for months or years. On the contrary, it makes sense to borrow, for example, when you want to furnish your first apartment, where you will use this equipment for many years.
How much can I borrow?
It is important to know your options. Do not overestimate and avoid overly high commitments. Take your pen and paper, write down your household’s monthly income on one hand, and on the other hand make regular expenses such as rent, energy, insurance, food costs, transportation, school clubs, regular shopping, and more. Don’t forget the irregular, seasonal expenses that await you in the near future. The difference in income and total costs will reveal what you can really afford.
For how long do you take a loan?
When you wrote down your income and expenses, you see how much you are able to pay monthly and how many months you want a loan. Do not be tempted by too low installments, which you do not expect them to repay. Conversely, evaluate your options realistically and critically, and if possible, choose a higher installment, even if you should be stunned for a while. Ultimately, your loan will be much cheaper. Also, count on some unexpected expenditure reserve.
How to choose a provider?
If you are considering a loan from a non-banking company, make sure that it is eligible for loans, a list of lenders will help you. Anyone who does not have a license and lends money for a fee does so illegally. In your own interest, avoid such a company if you do not want to get into big trouble. When borrowing, you can be sure that it certainly has a lending license.
Compare offers and pay attention to all details
Compare multiple loans and read all available information. You can use online calculators to estimate the installment. Note that interest is not a key parameter in the selection. Also note the fees and conditions. Often advantageous interest is conditioned by insurance or active use of the account. Also check out the seasonal discounts that lender offers to clients. You can save on fees and interest.
There is no need to “overwrite” applications
It’s good if you compare multiple offers and don’t touch right away. However, do not address too many companies, up to three. With a large number of pre-approved loans, you may prove to be ‘trusted’ in your registries , your credibility is declining, and in the end, this may be the reason you will eventually not receive the loan.
- All about credit register
- It is hard to get a credit with an entry in your registry
- Have you got into debt (not only) for Christmas? Here’s how to get out
- Is it worth refinancing a loan today? You can save hundreds to thousands of dollars
What else to watch out for?
While the RPMN reflects how much the credit will cost you, it says nothing about the additional charges or sanctions that may arise during the repayment period. They can get you overpriced. It may happen that you are late in the installment or run into unexpected financial difficulties. Therefore, you should inquire in advance what will happen in this case. Also be interested in the possibility of early repayment.
Do not hesitate to sign
Be sure to read the clause carefully before signing and ask questions you don’t understand. Never sign a contract under time or other pressure. Also avoid emotional spontaneous decision making.
And one advice to conclude: If your bank does not approve your loan, it will protect you from excessive debt and repayment problems in the future. Maybe it is the right time to get your finances in order, get rid of the disadvantageous old debts and find ways to save.