Ravi Chandran
When shopping for a best loan deal, never forget to have a contract with the lender
By: Hitesh Khan/
Shop around and compare where to get the best loan deal. To shop for the best loan deal may sound like an obvious statement that you may have heard many times. But have you really taken that advice to heart, or are you desperate to get a loan and willing to accept any terms just to get cash in your pocket? Here are five things to consider when shopping for a best loan deal.
Interest rates always matter when you shop for a best interest deal.
Table of Contents
Even if you have so-so credit and know that you won’t qualify for the best rates it’s important to decide if the interest rate you are being offered is worth it. Just because you think you can handle high interest payments doesn’t mean you should get locked into them. If possible, hold off on applying for a best loan deal until your credit has improved.
Fees and penalties matter when you are shopping for a best loan deal too.
For instance, there may be a fee to set up the loan or a penalty for making a late payment – or paying early. Some lenders charge fees for paying off a personal loan balance ahead of schedule. It’s important to get all the information about fees before signing up for a loan.
Also, beware loans with no credit check when shopping for the best loan deal.
No credit check loans always cost more than those that require a review of your credit report. No credit check loans include payday loans, which charge interest rates that can have an annual percentage rate (APR), sometime as high as 300 percent. Think long and hard before getting a fast loan from a moneylender, even if they are licensed moneylenders.
Get some free advice when shopping for the best loan deal.
Free advice is useful to help you wade through the challenges of getting start-up financing. One of the persons you should talk to to get free advise is the independent loan specialist. It is good to understand the legal jargon in that stack of papers you will have to sign before the small business loan is disbursed.
The small business loan or even personal loan documents could be a bit overwhelming, but with the help of an independent loan specialist, you can get a full understanding of what the legalese means. In fact, many independent loan specialist encourage loan applicants to understand the loan documents before they even complete a formal application for a loan.
Are you trying to pay off debt? Loans for consolidating your bills can be be helpful when you are trying to improve your credit score and get out of debt. However, debt loans are not a good idea if you don’t have a plan to stop overspending. A debt consolidation loan should be part of a bigger plan to improve your finances, which should include budgeting and saving.
Some loans require collateral. This means you are agreeing to hand over some type of personal property if you end up defaulting on a loan. Some items that are used as collateral for loans include homes, cars, boats and jewelry.
All loans should have a contract
Even if you borrow money from a friend or relative it’s important to get the terms and conditions clearly understood before any cash changes hands. Use a written contract so that there are no misunderstandings about interest rates, collateral, number of months to repay, or any other terms.
The Bank of Mom and Dad may seem to be the best place to go to for the cash you need, especially if you need it in a hurry. But borrowing from relatives (even close ones) or friends can be a very quick way to put a hitch in an otherwise solid relationship.
So, when you borrow money from your nearest and dearest, do it with paperwork, a payment schedule and a plan to follow if and when you can’t make a payment. Interest is optional. Your lenders can charge it if they chose to, but many do not.
One best small business loan tips most people won’t give you is to not wait until you are desperate to ask for money. This is not a good foundation for a successful loan application. The bank wants to feel secure in its decision. It does not want to hear that your business needs the loan to survive; it wants to hear that your business needs the loan to grow.
How to Secure Small Business Loan Quickly
If you are searching for a small business loan, the loan consultants at iCompareLoan can set you up on a path that can get you a it in a quick and seamless manner. Our loan consultants have close links with the best lenders in town and can help you compare various loans and settle for a package that best suits your needs. Find out money saving tips here.
Our Affordability Tools help you make better property buying decisions. iCompareLoan Calculators help you ascertain the fair value of a property and find properties below market value in Singapore.
To find out more about Peer to peer lending versus that of SME loans so as to make an informed decision: SME Loans or Peer-to-peer (P2P) Lending – What is the difference?
Contact us for advice on a new SME loans.
Contact us for home loan or refinancing advice.
