What are the most important aspects to consider when looking for a loan?
Quickness is one of them; getting money in a timely manner is important. Low rate of interest is another key to finding the loan that’s right for you. Dependability and security are not to be dismissed, because if you can’t rely on your lender then you shouldn’t be doing business with them.
What about transparency? Have you considered how vital and important this is, in regards to the money you borrow?
What Transparency Means to You
If something is transparent, you can see right through it. In terms of borrowing money, transparency means that no detail of the arrangement is hidden from view. Every payment, every percentage point, every fee, every last letter of the contract is available for you to peruse before, during, and after the application process.
Legally, transparency is required in the lending process. But not all lenders are created equal, and many of them will throw shade over certain details to avoid scaring off potential borrowers.
This does not necessarily mean that anyone is breaking the law, or even hiding things from you. But behind all the red tape and paperwork, sometimes there are some key details that get lost in the mix.
Balloon payments, surcharges for early payment, fees for late payment, deferred interest – these are important details that you don’t want to surprise you after you have signed the contract.
No One Likes Surprises
When it comes to borrowing money, there is no such thing as a good surprise. “Let’s not tell them about the money they will save” said no lender ever. If there is something in the loan process that will save you money, you better believe they will tell you about it. But something that may cost you money? That little detail may not be as loudly announced.
You need a lender who won’t surprise you, a lender with no tricks up their sleeves, and no rabbits in their hats.
Key Questions to Ask
Make sure you ask every question there is to ask. When you get an answer from the lender, make sure you find that same answer in the contract or paperwork. Any and all details about your loan need to be written, or it is not a legal and binding contract. So investigate and dig deep!
- When each and every payment is due through the life of the loan
- What each and every payment will be, down to the penny
- Will the interest rate or APR change over time?
- How is the interest calculated?
- What happens if you miss a payment?
- What happens if you default on the loan?
Look Out for #1
These questions are particularly important when dealing with an online lender. While many lenders are legal and legitimate, there are always bad apples who simply want to get people on the hook for loans, and are happy to gloss over details in order to make the loan look more attractive. Even if you are dealing with a site or company you have used before, always check the fine print and always read the details.
The great thing about an online loan is the speed; you can apply, be approved, and receive funds much more quickly than you can by using a brick and mortar lender. But don’t ever rush through it, always take enough time to make sure the terms are right for you.