(Image via morgueFile http://goo.gl/S1t4Nr)
These days, you can barely walk two feet without hearing someone talk about loans. They’re becoming a very popular way for people to get out of small financial holes. But, you have to be prepared before you get a loan. Check out the top things to consider, before you get a loan:
This is the big thing you have to consider here. You’ve got to think about where you’e getting your loan from. If you’ve found a legitimate lender that gives out loans all the time, then you’re fine. So long as people can vouch for them and say that they’re good. But, if you find some dodgy loan shark, the alarm bells should start ringing. There are people out there that will prey on the weak minded and exploit them. If you’re in a spot of financial bother, you can bet you’ll find a dodgy lender that offers you an easy way out. Before you know it, you’re in heaps of debt and a worse place than you were before.
What you need to do is shop around for the best lender out there. These days, there are places where you can apply for loans online. The benefit of this is that you get to select the amount you want and see how much it will cost you before you commit to it. Plus, you’re less likely to feel pressured into getting a loan you don’t want. When it’s done face to face, you may feel that extra pressure.
You’ll also want to have a look at yourself and consider your needs. Think about why you want the loan, is it practical? You may find that there are better alternatives to getting a loan. Commonly, people will look for a loan when they’re buying something big. There are loans to help people finance a house, and loans to help people buy a car. These are two instances where I think your needs warrant a loan. When there’s big money at stake, sometimes a loan can be the only solution for you.
But, there are also times where I think a loan is not needed. For example, say you want to buy some clothes or a new pair of trainers but don’t have the money. Some people may consider a short term loan to get the money and buy new things. But, if you just save up or get a job, you might be able to afford new things on your own. In my opinion, loans are best when it concerns the big things.
The Interest Rates
We can’t talk about loans without talking about interest rates! This is the thing that will determine how costly your loan will be. If a loan has high-interest rates, it will end up costing you more, the longer it takes for you to pay it back. Then, we have different types of interest rates. You could get a loan with a fixed interest or one with a variable interest. Fixed means interest stays the same at all times, variable means it could go up or down.
You have to look at a loan and consider whether the interest rates are good or not. And, think about what type of rate you want.