Simple Tips For Getting Your Loan
So, you want to get a loan?
Here are some simple tips that will help you make an
informed decision about what kind to get, and who to get it
from.
First ask yourself: do you really need it?
Can you manage without it?
Is it for something frivolous, like a holiday?
Could you get the money by other means: part-time job, from
a relative, the sale an asset?
Don’t put a monkey on your back if you can avoid it.
A loan varies according to:
The amount borrowed;
The interest rate;
The type of rate (fixed or variable);
The term (repayment time in months or years);
Deposit (downpayment);
Associated fees (broker, origination, prepayment etc.);
Insurance required by the lender.
You are buying money for more than it cost the lender.
Simple.
It’s a mistake to only care about the interest rate; there
are also arrangement fees and prepayment penalties to
consider. Many ‘no fee’ credit lines have a pre-payment
penalty. This is how brokers and lenders make their money.
Work out the total cost of your loan before committing.
To ensure you get the best terms, keep your credit-line as
small as possible. Loan officers tend to count the total
line of credit available as a liability.
Pay off small debts before the due date. Cancel credit cards
you are not using. Consider their interest rates and fees,
when deciding which cards to keep.
If your spending is out of control, don’t put your home at
risk by getting a home equity credit line to pay off your
credit-card debts.
Shop for rates when the market is calm. Rates change from
day to day, so compare lenders. The quotes you get should
all be from the same time period.
Submit a neat application form; it shows you’re
business-like and efficient. It will be read and assessed by
a human being; appearances count.
Only pay up-front fees to well-known institutions, or ones
highly recommended by trusted sources.
Don’t sign documents without reading them. As soon as
possible, before you close the deal, review the documents
you’ll be signing, and make sure you understand them, so you
won’t have to sign them in a hurry.
Keep a copy of every cheque you write for your loan. If you
call your lender about your loan, make sure you get the full
name of the person with whom you speak. Make a note of it.
You may be dealing with a large bureaucracy, and will need
to refer to this conversation later.
If you find yourself in a dispute with a lender, don’t send
correspondence to the same address you send your payment.
You need to deal with the decision-makers, not the account
clerks.
About the author: T. O’ Donnell
(http://www.tigertom.com/personal-loans-uk.shtml) offers
personal loans, advice, an ebook and a loan calculator, in
London, UK.