Today, loan offers are pouring on us from all sides, and providers are competing to offer a faster, more profitable and affordable loan. If you are interested in a loan, there is definitely something to choose from. But what to focus on, so you say, do not take over?
1. Make a comparison
It is logical that this step should be the first. Of course, only after you have made it clear what type of loan you want and what you require from it; There are many possibilities – from the lowest loans for a few hundreds or thousands of crowns with a maturity of just a few weeks, to consumer loans or non-purpose so-called American mortgages for many hundreds of thousands or even millions of crowns.
So if you are clear, start by doing a small (but even larger) survey of the providers who offer the matching product. There is nothing worse than taking gratitude with the first offer that will interest you, and then bitterly regret finding out how much better you could have made elsewhere.
2. Click the provider
A loan is a significant commitment and you certainly don’t want to put yourself in the hands of someone. Therefore, choose a reputable and proven company – whether you are interested in a bank loan or a non-bank loan. You can learn a lot of important insights on various blacklists and online reviews.
However, do not be uncritically influenced by the opinions or attacks of anonymous users, rather as research. Also, it is not always true that the more well-known the society, the more serious it is. Do not be tempted only by a resounding name.
3. Read twice, sign once!
Business terms and contracts do not want to read to anyone. They are written deliberately in an incomprehensible language, tiny, dense script, it takes a lot of time, it hurts eyes, and so on. Therefore, if you buy a set of plastic cutlery on the Internet, you may skip reading the terms and conditions.
But don’t do it and get over it with a credit agreement. It is ideal – especially in the case of a higher loan – to consult the contract with a lawyer or at least someone you know understands such things. Also be aware of the obligatory font thumbnails and various footnotes.
4. APR, interest rate and hidden charges
Now we come to a fundamental issue. Many people are still satisfied with the interest rate when choosing a loan. However, it tells us a little about the final amount we will pay back in addition to the provider. An essential indicator is the so-called APRC.
This is the annual percentage rate of charge, that is, the sum of all costs (interest, fees, etc.) that you pay extra for the year with the loan repayment. It is a common practice for not very honest providers to lure those interested at lower interest rates – and to conceal somewhere the fact that the APRC is several times higher.
Beware, even if you look at the APRC, be vigilant about formulations such as “ APRC starts at…” or “ APRC from… ”. Many people do not notice this detail and count on the fact that the minimum APR is final. Of course, this may not be true.
What is the APRC and why is it worth paying attention to it?
5. Penalties and sanctions
This issue needs to be particularly focused and careful. Do not expect the provider to be lenient in the event of default. On the contrary. Some providers directly assume that many people do not study penalties and penalties for late payment. Although they will offer the loan relatively “advantageously”, but absurdly exaggerated fining inattentive individuals will profit easily.
Transparent conditions are essential
It is therefore clear that when you set up a loan, you may face various pitfalls. However, choosing a solid provider (see the second paragraph of our article) can prevent most of them. It is very important to choose a provider that offers really transparent conditions and is willing to tell you immediately how much you will end up paying for each loan.
However, do not just appease the online calculator and always read the terms as well and focus on the other risks mentioned here. Remember, you take the loan to get better – not the other way around. Therefore, pay sufficient attention to your loan selection and keep your head cool.