Before applying for a loan, be sure to consider these eight tips:
- Before getting a loan, always evaluate if you really need this loan. Loans are expensive. Can you wait, do you need that vacation, can you do it another way?
- Always start by knowing your credit rating. You can have three free credit reports each year from either Experian or TransUnion or Equifax. If your rating is 760 or above, you are entitled to the best rate of interest. Below that, as long as you do not go under 620, you are still a good risk. If you are below 620, it would be best for you to clear up your credit before going for a loan to avoid gouging interest rates.
- Pay down any small debts you have to get the best loan rates.
- Write a neat and complete application. It will be a first impression of you and that does count.
- A secured loan is less risky than an unsecured loan, so it will have lower interest, but you will need some kind of collateral for a secured loan.
- You can negotiate the terms of a loan. The interest rate is sometimes adjusted slightly or fees may be waived.
- Don’t borrow what you’re offered. Be aware of what you can afford monthly before you negotiate a loan.
- When paying a loan, always keep copies of each check or payment to avoid any mistakes about your compliance.
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