There are certain moments throughout our lives when it is necessary for us to ask for a loan. It may be the perfect solution when we are thinking of buying a new vehicle. Without a doubt it is the only way we will have to access a home. It is also possible that at any given time we need liquidity for our business or to solve an everyday problem.
Whatever the case, requesting a loan is part of the daily life of all citizens. However, you may not know it but if you want it to be much easier for you to get a positive response there are some tips.
From Tzedakah House we want to offer you the 10 best tips to request a loan . This will ensure you get the best deal. Would you like to meet them? In that case, keep reading.
Top 10 tips for borrowing
Whether you have to advance money to your suppliers, carry out a reform, buy an apartment or pay for your children's education, requesting a loan is usually the most appropriate option.
Today there are a large number of different opportunities and financial entities that are dedicated to lending money. We can talk about ICO lines of credit, loans from traditional banks or credit institutions that have emerged with great force since 2012 as a result of the crisis. Private lenders are also an interesting option.
However, whatever credit alternative you choose, we want to offer you 10 tips for requesting a loan that can be truly useful.
1. Order only what you need
If it has been more than ten years since you have signed your mortgage, it will not be surprising that at that time the bank financed you for 100% of the total instead of 80%. Despite not needing it many times, I insisted you request the maximum financing. In this way, for example, you could buy furniture or appliances. The same thing happened when you went to the bank for a loan to renovate the bathroom. In the end you ended up with more capital and you also reformed the kitchen.
This trend has been disappearing after the start of the crisis. Both banks and citizens are now much more cautious about what they ask for. Hence, the best initial advice we can give you is not to ask for more money than you really need . In this way it will cost you less to be able to face the expense and your debt will be lower.
2. Be clear about what the money is for
Regardless of who you ask for the money, one of the questions they will ask you will be to know the reason for the request and you must also justify it. It is clear that it is not as convincing to ask for a loan to pay other debts than to do it to reform the kitchen. In fact, depending on the type of expense, you will have different loan models at your disposal . Each of them with its own advantages.
3. Pay special attention to the APR
One of the most common mistakes when applying for a loan is not taking into account the actual cost of the loan. Or what is the same , pay attention to the APR . The advertising of the credit institutions is usually somewhat confusing and misleading since in many cases they offer more importance to the TIN. However, the APR is the key to knowing the interest, expenses and commissions that you will have to pay for your loan. If you want to know more about Differences between TIN and APR of a loan, be sure to read this post.
4. Calculate the repayment terms by hand
Today there are many lenders that offer truly long financing terms so that the monthly payments are much lower. Although at first glance this may seem like a good option, the truth is that it is not. Think that even if the monthly payment is lower, you will spend much more in interest. Hence, the best thing, before applying for a loan, is to perform calculations and see how much money you can pay per month without it being complicated.
The shorter the repayment period (although the installments are higher), the better. Thus, the total to pay during the entire life of the loan will be lower.
5. Do not close loans for amounts that you can not repay easily
It is clear that the ideal is to pay off as soon as possible and have the minimum number of total installments. However, it is of no use that we adjust the installments and the repayment period a lot if we are not able to repay the amount in time without involving a huge effort. Try to follow the 50/20/30 rule to calculate the total.
6. Always meet deadlines
If you want your loan to work as it is, another of the great tips we can give you is that you always meet the payment deadlines. Think that in case of delay (even if this is only one day) the lender can apply an extra cost through default interest. These interests are usually much higher than the ones you pay regularly for your loan. The more you delay, the more late payment interest will be charged. In addition, if the credit institution begins to consider that you are not going to fulfill your part of the agreement, they can reach the embargo.
7. Make sure to ask for the money from a trusted lender
Since the crisis began, all kinds of credit institutions have emerged that offer capital to both companies and individuals. It is important that you make sure that they comply with current legislation and that they are regulated by the Ministry of Health and Consumption.
8. Don't forget to compare different options
Do not stay with the first loan option. It is likely that your first intention is to go to your bank of a lifetime. However, it is likely that you do not have the best credit option for you. Take a good look at the opportunities of all the credit institutions to choose the one that best suits your needs. On the internet you have many loan comparators that will help you make this decision wisely.
9. Once you decide on an entity, read the entire contract carefully
Make sure you read the contract you are signing for the loan from top to bottom and understand it . Including fine print. Likewise, if you have any questions about the conditions, do not wait to solve all the doubts with whoever offers you the loan. Not only is it part of his job, but he is obliged by law to explain even the smallest detail to you.
10. Preserve your personal information
If the loan is not finally granted to you by the credit institution that you have approached, make sure that they return all the documentation that you have had to present to assess your case . In this way you can preserve your privacy and you will know that your data will not be used for other purposes.