It does not matter what kind of loan or where you get it, if you need to borrow money there are a few best practices.
Mortgage? Car loan? Payday loan? Personal loan? Installment loan? Following these little tips will help you out in every possible loan you might apply for.
Before you borrow money and sign the loan contract:
Read Everything
You would be surprised how many people skip this step. Do not skim, do not have someone else read it for you, do not gloss over the fine print. The little bits and pieces of the loan contract is where all manner of fees and charges can wait, hidden, until it is too late.
Make sure you know exactly what you are in for before signing the dotted line.
Compare, Compare, Compare
When buying a car, do you just take the first one you see? When you find the one you want, do you check around to see what it may cost elsewhere?
Of course you do! Why should it be any different when you borrow money. Check multiple sources, and as many lenders are you can, and see which one works best for your needs.
Ask All of the Questions
Many companies, regardless of the business, are much more accessible while trying to bring in your business. You may find them much more responsive to your questions before you are locked into a contract. So before you sign, make sure you understand all the terms.
If you don’t? Then ask questions. Ask ALL the questions! And if they won’t answer them to your satisfaction, they probably aren’t the lender to borrow money from.
Keep Copies of Everything
It does not matter if you have paperwork, or apply for a loan entirely online, you still need to keep copies of everything involving your loan.
If there is no physical paperwork, then take screen shots. Save all the documents you are sent from the lender, and keep them someplace easy to access when you need to reference them. Also keep your bank statements to make sure all the numbers continue to add up.
After you have signed the contract, there is one “golden rule” that will help you more than any other.
Pay It Off ASAP
The longer you have money borrowed, the more you will be paying in interest. This is the nature of all loans. The faster you repay that loan, the less you pay.
There are some loans structured to last a certain amount of time, and they do not allow you to make extra payments or early payments. In these instances, contact the lender and see what options you have.