Looking to borrow some cash but are worried about the consequences? Follow these top tips to make sure that you nab the best possible loan deal.
Have a healthy credit score
Before you run to any particular lender, the first thing you need to do is check on your own credit rating. As expected, the better your credit score is, the better your chances are to get accepted and to get a reasonable deal. Even if you haven’t started on one yet, take the time to research so you could have an idea how much the lender will most likely charge.
Know all the fees
Many borrowers commit the mistake of looking solely at the loan’s interest rates. However, there could be many fees associated with the loan, such as processing fees, late fees, early repayment fees, etc. It’s important to be aware how much the loan could cost you should you be late or cannot afford to meet your scheduled repayment. Additionally, even if you originally haven’t planned on paying the loan back in full sooner, it would be wise if you can do so without any penalties should you have the needed cash to pay off the full balance.
Do not apply for too many loans
Whenever you apply for any type of loan or credit, the lender will have to pull out a copy of your credit report. Unfortunately, too many inquiries could be seen as a red flag, and providers tend to be hesitant on granting your application. You should space out your loan applications and aim to apply only when the chances of getting approved are high.
Borrow only what you need
Borrowing a smaller amount of loan could mean that you’d have to pay higher in interest rates as compared to when you borrowed a larger amount. Still, a smaller loan helps you to qualify more easily because the risk is lower. In addition, a smaller loan means you could finish off with your repayments sooner and the chances of default are much lower.
Be ready to bargain
Negotiating is a skill that you shouldn’t take for granted whenever you’re shopping for a loan. Even if you’re not the best haggler, it shouldn’t hurt to ask if there’s any way that you could pay less. And even if you don’t have the most impressive credit history, you shouldn’t simply accept the first option that was thrown at you.
Whatever type of loan you are looking to get, it always pays to explore your options. Most often than not, the first deal you’ve found is not always the best. There are many comparison sites online that should give you a quote across different lenders so that you can find the most affordable rates without even leaving your home.
Read the fine print
There’s a reason those contracts consist of too many pages, sometimes printed in very small fonts. Many lenders want to make sure you miss out on those important terms and remain unaware of the traps. To avoid this, always take the time to check the small print, and, even better, bring someone to double check with you.