Taking a loan can seem like a good solution to many problems. There are moments in our lives when, due to different circumstances, we simply need to apply for a personal loan – either because of a momentary lack of financial stability, facing an unforeseen expense or buying an expensive good that goes out of the monthly budget. Yes – it gives you the opportunity to go on holiday, buy a new car or a new kitchen without having to save the necessary amount of money in advance. Buy now and pay off over a long period of time – that’s the philosophy.
However, the fact that you now use the funds you don’t really owe (but that you borrowed) means that you’ll need to pay them back sooner or later, together with the cost of borrowing the funds i.e. interest. Repaying a loan can often be too much of a burden on your home budget and on your nerves. Therefore – you need to think carefully before making the final decision to do it.
However, if you do decide to get that loan and if you want it that bad, keep in mind that there are a large number of financial service providers and that they all offer numerous kinds of loans and other financial products under different conditions.
With the growth of the financial system in recent years, one of the problems we could face is choosing the bank due to the wide variety of possibilities. It happens on many occasions that we don’t know which one to choose – the same type of loan is offered by public banks, private banks, financial banks and also lenders. So, before choosing where to request yours, you should consider the following factors.
First of all – Inform yourself!
Gather the information you need to select the right option and make sure it fits your needs. The comfort that the entity offers in terms of security and reliability is the first thing you need to think about. If your relatives or friends are so much into their banks’ services and keep saying they have an account there for years, that could be a possible guidepost for you to bring your decision easier and get something that has already been verified by others. However, on the other hand, is it really good to always be guided by bad or good experiences of people you know? Have in mind that each of the users has different preferences and can value one or the other thing more. The most advisable thing would simply be – go to all the banks that have caught your attention and ask for every single thing that might be relevant. And then make a proper assessment and choice. It sounds exhausting, but hey – it’s your future money. It’s not something you would play with.
Things to compare
Let’s see what things should we compare when it comes to various bank offers:
All institutions, whether banks or fintechs, manage a minimum and maximum amount to lend. This means that you should compare all the banks with rather alluring offers and their amount ranges so that you can find the one that suits you best according to what you want to achieve. To help you a little more at this point, we recommend you to make a budget review or list. Write down each of the things you need to buy, achieve or support with that money, along with the cost they would generate – that way you’ll already have a real or at least approximate amount that you should request.
Yeah – everyone is worried about this one. This point is fundamental since, as you probably know, all the credits and loans are managed with a different percentage of interest. As this is established according to the risk that exists when lending money and each institution calculates according to its own parameters, the best option would obviously be to choose the one with a lower percentage. It’s very easy to make a comparison here because there’s always the indicator that can show you the estimate of the total cost including interest.
Many banks or financial institutions require that you present a guarantor in order to provide you with a backup and pays off all the money given to you in case you can’t afford it. But many others have thought that this is just an access limitation, so they no longer request it. You should definitely choose the institution with the most appropriate conditions for you. Otherwise, investing in your business or getting any kind of loan under guarantor conditions that don’t match with your perspective might not work for you.
Be sure to compare offers from several banks. Often, the terms of the loan are not different at first glance, but if you look at them in more detail, you may find that the low-interest rates that are advertised aren’t so low at all – and that the conditions that seem to fit you perfectly are not realistic at all. If you have decided to apply for a loan, have a conversation with a bank clerk and keep in mind that you need the bank as much as they need you and that the relationship with the bank is primarily a partnership.
Application processing time
Okay, so here’s the fact: the faster they approve the loan, the sooner you get it and use the resources, so it’s fundamental to assess the information on the agility of the bank in the application process.
Also, what’s important to mention is that today you can find some really cool online loan services too, if you need an alternative and if you’re kind of desperate and in a hurry to get some quick cash. Loanmart, for example, is an absolute star among the title loan services – if you need some extra money, they’ll use your car’s title as collateral, but you might not even notice since they let you keep your car and drive it while you’re using the loan.
Now when you know which things are crucial when it comes to getting loans, keep going on and make sure you’ve chosen the best of the best – you’ll thank yourself later.