You do not apply for a loan on a whim. There are a lot of factors to consider before putting yourself in an irreversible situation. Once you have decided on which loan type you will be going in for, you will have to consider these details;
- Interest Rate: Even if this is one of the most important details governing our decisions, you should not be blinded by faulty advertising. A lower interest rate is a good thing; but it also means that the repayments will carry on over a longer period of time. If the interest rate is reasonable compared to the loan term, then go ahead and sign those papers.
- Can you repay the loan? Consider other expenses such as car monthly installment, transport expenses, food, child's education and etc. The best way is to write down all your expenses on a piece of paper and do the necessary calculation. After which, apply for the loan when you are sure that have the ability to repay the loan
- Loan Term: A lot of loans have fixed terms, usually 15, 20, 25 or at most 30 years. Mobile loans have periods of 1 ,3 and at most 6 months as per current trend.Some lenders will enable you to change the term, if they think you can pay the whole debt off within half the time. But this may not be an option that lenders will willingly offer. Ask your bank if they offer opportunities to pay them back earlier or later, and how the change will affect your interest rate as well as monthly payments.
- Read through the terms & conditions of your loan and understand clearly before making a decision to sign the document. This will allow you to avoid unnecessary fees which is stated in the document and was unknown to the borrower
- Please do a check on the authenticity of the Money Lenders license that you going to loan from. This is to safe guard yourself from making a loan with an illegal money lender company or one that uses a fake license
- Avoid taking loans from many different creditors. This will prevent you from getting confused with the different creditor policies, date for repayments and charges.