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Factors to Consider Before You Get a Loan

Updated on April 6, 2009

We have all sorts of loans these days. This enables us to make big purchases such as automobile, boat, RV, and house. Loan involves two parties, the lender and the borrower. The borrower gets finances from the lender with the agreement that he will repay the same amount in an agreed period with the corresponding interest.

The loan can be secured or unsecured. Secured loans require collateral. This means that the lender can take the property specified by the borrower if he fails to make the payments. The interest rates for secured loans are lower because of the collateral. People with bad credit records and low credit scores can apply for these loans.

 

 The unsecured loans on the other hand do not require collateral. Because of this, expect higher interest rates. If you wish to apply for this type of loan, see to it that you have high credit scores and a good credit history, otherwise, you will not get an approval.

Loans are meant to help people. However, it can also cause a lot of problems if not paid accordingly. You could lose your property. Ignoring loan unmade payments will only make the matters worst. That is why you have to think about it carefully before you get one.

 

Although assistance like student loan debt consolidation is available,you have to consider several factors before getting a loan. Here are some of the things you should think about:

Can you afford the loan?

Keep in mind that you are going to make monthly payments. You have to be certain that you will be able to make those payments to avoid problems. Do you have a financial cushion? This means that you have savings to cover a few payments in case you lose your job, or encounter other financial problems.

 You should be able to afford the loan to avoid incurring other debts. If the monthly payment is way over your budget, chances are you will incur debts through your credit cards. Since, you are off your budget; you will not be able to pay your credit by the end of the month. This will lead to higher interests.

Are you ready for a long-term debt?

Keep in mind that you will be dealing with loans for a long time, 15 years at the least. Will you be able to handle this? Since having a loan is a commitment, you have to think about it thoroughly. Do you really need the merchandise? How are you going to pay it? Is your resources enough? What are your options?

Before signing the contract, you should understand the terms. If you can, will you be able to pay-off the rest of your dues earlier. Debt consolidation home equity loans is an option to manage your loans. However, that too is a long=term endeavor. You have to come up with a plan that will help you manage your loans and debts. Decide only after you have fully understood the terms.

Look for the best lender that can give you the best deals. Here are some of the things you should look into when looking for a lender:

1. Interest rates

The first thing that you should look for is a low interest rate. However, this is not the only thing that you should look at. You should also consider the length of the term. Most of the time, lower rates have longer terms, so you have to be careful with the deal you choose. Compare the loan programs with the interest rates as well as the length of time involved.

2. Check for hidden fees

Read the contract fully before signing it. Check the different charges reflected in the prints that the company has given you before signing anything. Ask questions about confusing entries. This will help you unveil hidden charges. It would be best if you were with someone who is familiar with the transaction to help you decide.

3. Types of rates

There are two types of rates, the fixed rate and the flexible rate. As the name suggests, fixed rates do not change, which means that you know the exact amount you will be paying. On the contrary, the flexible rate changes depending on the state of the economy. It will be beneficial to the borrower if the rate is lower due to a good economy. However, it can be a disadvantage if the rates are higher.

If you think that you really need a loan, consider the foregoing factors before closing the deal.

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      Simohamad 4 years ago

      There is no such thing. When you use those types of lender, they prey upon people like you with high fees that make the mob blush. If you want reasonable fees, use a legit bank ..but I am willing to bet you do not have the credit and income for that or else you would not be resorting to online lenders.

    • profile image

      Nozi 4 years ago

      Hi I would like to see,1) More online comps that need X amuont of online tournament wins to enter. So you spend more games against you're level opposition rather than too poor or too strong. And with each harder tournament better prize money so it would look like:No tournament wins 2k Prize3 Tournament wins 3k Prize5 Tournament wins 5k prize10 Tournament Wins 7k prize20 Tournament wins 10k prize40 Tournament Wins 15k prize2) League creater for ultimate team so you can set one up with you're mates3) A greater change of formation specific to the player. So you cant change every position but messi could do striker, attacking mid and winger.

    • profile image

      Sergey 4 years ago

      Honestly I agree with hayden., and I love the whole sell your squad idea. Personally I'd love to see pace bmcoee less of a factor. I'm a very total football kind of man, I love having passing specialists in my team and being able to dominate possession which is why I hate those stupid untalented quick guys some shit team sticks up top. I think I also want to see more specialization when it comes to stadiums, like if I'm at the etihad, I want the net to be black or if I'm at the bernabau I want the crowd right behind the goal instead of 80 yards away. I also want more freedom on celebrations. If I just scored a goal in stoppage time, I whhjhant to o rip my shirt off or go celebrate with the crowd or the subs. And if I'm up 6 or 7 nil why can't I just start walking emotionlessand give one of my teamates a gentle high five. I also want new commentators, like Macca or and Ian darke on ESPN who are the best! Rather than Clyde tilsley and his butt buddy Andy town send, I mean come on EA get creative!!!

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