5 Signs of An Ideal Loan
How should the ideal lender and the ideal loan be like? Loyal and undemanding, distributing large amounts for a long period and at a minimum percentage. What else? Better if he does not require money back. We, the borrowers, want everything and we want everything at once, as in that song. But in real life this does not happen. To keep it fair it is important to make sure that the benefits of mutual cooperation can be obtained by both sides. And yet, you can find a good lender! We will tell you what criteria the credit institution should meet in a rapidly changing world.
In fact, everyone has his own unique and ideal lender. It all depends on the financial condition of the borrower and the type of the loan product that he chooses. Having said this, we should note there are general parameters by which a potential client can evaluate a financial institution.
We have identified 5 main criteria which we present below. Let us look at them in more details.
Criterion #1. Low-interest rate
The lower the interest rate is the better -probably lot of people would agree with this. However, in search of the most favorable conditions, you should be careful not to miss one of the most important things – these are the hidden payments. Quite often banks, aiming at increasing their own income and reducing risks, impose a customer service insurance (health, collateral, etc.). Which means that it automatically increases the cost of the loan. The most unpleasant thing is when the borrower finds out about this kind of hidden payments during or after the signing of the contract. Well, now you are aware of this and can “protect” yourself from trickily hidden payments.
Criterion #2. The speed of issuing a loan
We, the borrowers, do not want to lose even a minute. Especially if we are facing a serious financial problem we want to get the loan as soon as possible. Quick processing of the application (up to 30 minutes) and instant money transfer to the card is the best of what credit companies can offer today. This sounds very good. But while rushing to get the loan make sure you do not miss any important detail. Of, course time is money and you want to sign and get the money soon, just be careful and give it some more minutes to familiarise yourself with all the documentation.
Criterion #3. A feasible payment
According to different studies and experts’ estimates, the loan payment should not exceed 30% of the monthly income of the consumer. Otherwise, there is a possibility of a situation where the borrower simply can not pay the debt. Therefore, always really assess your chances.
Criterion #4. Without specifying the purpose
Some creditors, in particular banks, require indicating what the client plans to spend money on. For many borrowers, this is an unpleasant question. Sometimes a client does not know how to use a loan for sure.
But to have a specific goal, even if you do not want to disclose its company, you still need it. In a crisis, it is very important to assess the risks and understand all responsibility when preparing a loan. The decision to use the loan should be well thought over, it is better to take a loan if it is absolutely necessary, invest in its development or in something tangible.
Criterion #5. Sufficient time for redemption
Do not take the loan for a long time, if you are willing and able to repay the debt earlier. The less you use credit, the less overpayment.
What is it – the ideal loan
Which borrower does not want the interest to be low (or better without any interest at all) – the loan amount is large, and the payment is small. But this is absolutely unrealistic! Therefore, when choosing a credit institution, be guided by your preferences and carefully read the conditions. The attractiveness of a loan directly depends on the size of the interest rate and the absence of hidden commissions.
In our opinion, the ideal loan is a loan for small interest and for a short period of time. This form of lending is beneficial both for consumers who do not want to get into debt, and financial institutions that want to make a profit.
More inLoans & Credit
You Can Win Big with a Foreclosed Home. Let Us Tell You How
With home prices soaring in many American cities, buyers see foreclosure properties as an inexpensive option for securing a dream home....September 6, 2021
Do Not Pay For these Items with a Credit Card, Say Financial Advisors
Going cashless while we shop is probably one of the most convenient things that technology has brought to us. We can...September 6, 2021
Getting a Personal Loan Can Be Tough. It Does Not Have to Be
There is no universally applicable formula for securing approval for your personal loan application made to a bank or financial institution....September 6, 2021
These Dogs were Voted ‘Least Good Looking’ but We Love Them Anyway!
Talk about winning ugly. A pooch named Scamp the Tramp won 2019’s World’s Ugliest Dog contest, held in Petaluma, California, at the...August 31, 2021
SEO is Your eCommerce Startup’s Best Friend
If you are a small business still feeling your way around the internet landscape for the first time, you will find...August 31, 2021
The New Financial Wellness Mantra: All Expenses Are Negotiable
The word ‘negotiation’ is all about big business but everybody loves to negotiate. Some are adept at the art of bargaining...August 31, 2021
Choosing A Credit Card
We all know that the huge and harsh competition between credit card companies is in full swing nowadays. On the one...August 31, 2021
Kylie and Her Anti-Snapchat Tweet Shows that Stars Can Influence Stocks – for Better or for Worse
The rise of the social media and in celeb activities, increasingly play a major role in the stock market. Celebrity endorsements...August 31, 2021
Celebrity Parenting Hacks Revealed: Some of These are Just Brilliant – Part II
Celebrity parents do not shy about their parenting qualms, as they have numerous fans and followers, who could learn a thing or...August 29, 2021