9 Things you need to know before taking a loan
People take loans from banks just to meet up with financial requirements. Probably you want to complete your house or start a business of your choice and it’s necessary for you to take a loan from your bank. In this post, you will get an idea of the things you need to know before taking loans from your bank.
While you want to take loans, the lender will be asked specific questions from the borrower just to make sure it’s it won’t turn out to be a bad debt. Borrowers should understand the condition of taking loans from banks so that he/she won’t run into problems.
There are 9 things everyone must know before taking loans. After reading this, do well to share if you found it useful.
THINGS TO KNOW BEFORE TAKING LOANS FROM BANK
1. UNDERSTAND YOUR PREFERENCES: Before going to your bank, look at advance bundles and see what contenders are putting forth. You should know about what sort of advance you are searching for, the terms you can sensibly bear.
2. ASK QUESTIONS AND MAKE INQUIRIES: It’s important that you make inquires before taking loans from bank. Ask people who have experience with them or have taken loans before from that bank. Now analyze, compare and make your choice. Get all the info you need regarding to the loan so that there won’t be any mistakes.
3. APPLICATION: You are expected to apply to your bank to get a loan, stating the reasons; with enough evidence that you will repay the money. You might not necessary go to the bank, you can visit their websites and get all the information you need and also apply via their website. Though I always prefer going to the bank to get first hand information.
4. INTEREST: Personal loan is a lump sum, which a bank tends to give a customer to be paid installments with a specified interest over a period of time. Usually, loans can be for a year or more depending on the one you subscribed for. Banks collect interest annually.
5. TERMS OF AGREEMENT: One mistake people make is not reading the terms and conditions written by the company. It’s important to take your time sand read the terms and conditions so that you won’t face any debt related problems. Here are some things you won’t be told and it’s been written in their terms and condition. Information is power.
6. COLLATERAL OR SECURITY: Banks usually demand for collateral before loaning you. It might you car, land or house or even your assets. Note that when the bank is not asking for collateral, they might ask for any form of security that might be tied to your salary. Its better an asset is been used for collateral than to be tied to your salary.
7. UNSEEN CHARGES: Interest is definitely not the only money that you will pay. There are some hidden charges you will pay like the money you will pay for processing your loan and charges whenever you default in your monthly repayment of the loan. It’s very necessary to know about unseen charges, you can actually ask your account t officer to tell you more.
8. LOAN RESTRUCTURING: You can actually approach your bank to negotiate the possibility of restructure your loan if you are not okay with their terms and conditions. Do wait till you have problems, you can actually negotiate when you are already paying your debt.
9. CREDIT CARD: Applying for loan may not be the only option available for you. If you are in need of a short term loan, getting a credit card is another option for you and will definitely be useful. However, you need to understand the process on how to apply for credit card depending on your bank and most importantly, how to have a good credit score.
Now you have seen the nine basic things you need to know before applying for a loan in your bank. Everyone needs a loan, but the biggest question is can you repay at due time? Think about this before taking any loan from banks. Share as received.