Getting information can be a complex process. As a result, many of us simply ask our friends’ opinions. If your friends tell you that they have been to a particular outlet or movie theatre, you are more likely to visit it. Similarly, while thinking about securing a loan to pay off a debt or to tide over an unexpected expense, we should do a comparative study before choosing the ideal loan option. A smart customer always looks around and shops around before choosing a particular choice. Make sure you do too.
We must always educate ourselves on the various loans that are available, the rates of interest that are applicable, the time that is available to repay these loans, and which bank offers the best deals. This will help us determine the loan that will be the most suitable for our needs. Making choices is driven by multiple factors. But one factor we cannot ignore is affordability.
Payment terms are important in the repayment of any loan. Take for instance a loan for study abroad. This loan better have a long repayment tenure. This would allow the student in question to graduate and start earning before the question of repayment arises. Getting a job should happen before one is expected to repay such a student loan.
The borrower and the lender are the two parties to any loan agreement. All loans should take the interest of both parties to heart. While entering into a loan agreement, the terms and conditions are clearly written down and agreed upon by both the parties. That means that once sealed, neither party can deviate from the agreement.
An astute buyer realizes the importance of shopping around for a loan. There are hundreds of loans that are populating the personal finance markets. Thus, it can become confusing to decide which loan to take up. Given that most of us do not have expert knowledge of personal finance issues, it is helpful to contact a financial advisor. That is not all. Here is more to mull over:
1. Is the lender fulfilling your entire loan requirement?? – Is the bank approving the entire amount or only a portion of it? What is the initial amount that you need to pay? No matter what kind of a loan you are applying for, you will be expected to pay a nominal fee as part of the initiation process.
2. How much will you have to pay and for how long – Can you afford to pay the amount or will it be difficult? If you choose the latter as your answer, then you need to speak to the bank and try and alter the EMI payment pattern
3. Fines and Penalties – If you are not able to meet the EMI dates, what penalty will be levied? Will this be calculated on that particular installment or on the overall principal amount? There is always the chance that there might come a rainy day when your check does not clear. Find out what the lender will do then?