Ravi Chandran
Summary of basic guidelines to know before getting loans:
- Know your lender.
- Ask questions.
- Read the fine print.
- Keep copies of all signed documents.
- Obtain a copy of the Truth in Lending Act, so you know your rights.
By: Hitesh Khan/
Getting loans can be a very important decision, but finding and good lender, knowing the right questions to ask, and knowing what to watch out for can be difficult.
Table of Contents
Unscrupulous lenders often target consumers who are most vulnerable: the unemployed, low-wage earners, foreign workers, the elderly, and those who have poor credit ratings. Also, while many loan scams result from fraudulent lending practices, many legitimate lenders use tactics to lure consumers into accepting loans they know you cannot afford.
No matter how much money you are borrowing, or what kind of loan you are getting, there are some basic guidelines to follow that will help you make better decisions about your loan.
Getting loans means you have to be aware of different kinds of loans and lending tactics that can put you at financial risk.
https://www.icompareloan.com/resources/personal-loan-offers/
QUESTIONS FOR YOUR LENDER
Ask these questions of several different lenders to ensure that you are choosing the best lender. Each question should be carefully considered based on your situation.
Ask your lender:
How much are my monthly payments?
Ask yourself:
How big a monthly payment can I handle, given my income and my other financial responsibilities? What is the smallest loan I can take out that will satisfy my needs?
Ask your lender:
How many years will I be making payments on this loan?
Ask yourself:
If it will be a number of years before the loan is paid off, do I have an income that is secure enough to know that I will be able to make payments well into the future?
Ask your lender:
Is the annual percentage rate (APR) fixed or adjustable?
Ask yourself:
If the APR is adjustable, will I be able to make sufficient payments if the rate increases?
Ask your lender:
Will I be charged any additional fees?
Ask yourself:
Are these fees reasonable? How do they affect my ability to pay off the loan? Are these fees refundable if I refinance my loan?
Ask your lender:
Will the interest rate increase if I default on my loan?
Ask yourself:
If the interest rate increases, will I be able to make the necessary payments?
Ask your lender:
Does it help me in the long run to refinance my loans?
Ask yourself:
If I refinance, I may pay a lower monthly premium, but may end up paying more in the end. Is it worth it for me to refinance?
BEFORE GETTING LOANS, AVOID ANY LENDER WHO…
- tells you to indicate on your loan application that your income is higher than it actually is.
- pressures you to apply for a loan or to apply for more money than you need.
- pressures you into monthly payments you can’t afford.
- pressures you to sign documents you haven’t read.
- promises one set of terms when you apply and gives you another set of terms to sign—with no legitimate explanation for the change.
- tells you to sign blank forms and says they’ll fill them in later.
- says you can’t have copies of the documents you have signed.
- asks you to sign a loan that has credit insurance or any extra products you didn’t want.
OTHER TIPS BEFORE GETTING LOANS
Make sure you talk to someone you can trust before making any decisions about a loan. Mortgage consultants, financial advisers, and credit counseling services are good sources to help you make the best decision about getting loans.
Negotiate. You can always ask your lender to lower the APR, take out a charge you don’t want to pay, or remove a loan term that you don’t like.
Make sure you understand all of the items on the forms before closing.
Don’t be afraid to ask questions and be assertive about what you want, what you don’t want, and what you can and can’t afford.
Be sure to keep all copies of all the actual documents you are asked to sign.
Remember: Trust your instincts before getting loans. It is important that you feel comfortable with the amount of debt you owe. If it feels like it is more than you can handle, you should consider ways to make your loan more manageable or think about ways to avoid taking out a loan altogether.
How to Secure Personal Loans Quickly
If you have limited capital and are searching for personal loans to expand your business, 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.
If you are looking for a new home loan or to refinance, our Mortgage brokers can help you get everything right from calculating mortgage repayment, comparing interest rates all through to securing the best home loans in Singapore. And the good thing is that all our services are free of charge. So it’s all worth it to secure a loan through us for your business expansion needs.
Contact us for advice on a new home loan.
Contact us for home loan or refinancing advice.
