Taking a Loan: Errors, Tips, and Contraindications

“Take it now – pay later!” – such offers are very tempting for those who have been dreaming of something but cannot buy it. Today we will talk about the errors you should avoid when signing a loan agreement.


Three Points to Pay Attention to

When you are one step behind the loan conclusion, you should answer the following questions once again:

  1. What will be the overpayment? Looking at interest usually does not make sense because it doesn’t reflect the whole picture of the conditions under which a loan is issued. By comparing overpayments in different financial institutions, you can choose the best conditions.
  2. What are the conditions for early repayment? They can be different, and this is also an important argument in favor of choosing a particular loan product.
  3. What are the fees for arranging a loan? Choose the offer where this commission is as low as possible. Of course, before taking any loan ask yourself: “Are you sure that you will have a regular income or permanent job within 6-12 months?” If the answer is no, then you should not take a loan, no matter how attractive the loan conditions are.

The credit should be taken only in the currency of your monthly income. If you live in the USA – take in dollars, if your place of residence is Singapore – take it in Singaporean dollars accordingly.

The term for repayment of the loan will depend on the circumstances and the objectives of the loan. We advise you to take all consumer loans for up to six months. You have to use interesting offers that appear on the market and try to get a loan without overpayment.


Useful Tips When Taking a Loan

If you have already chosen the financial institution to get a loan, these tips will help you to do it in the right way:

  1. Keep your mind clear and carefully calculate the interest;
  2. Consider the risks of credit default;
  3. The payment should not exceed 30{1a7fca18ea4c249f4931ca7d7abe2a18a39d6eff38c3118f159edc24c5481cc7} of your monthly income;
  4. Never focus on one bank, even if you are a regular customer of it;
  5. Ask more specific questions about the conditions: interest rate, commissions, the possibility of early repayment, payment methods, etc.;
  6. Loan overpayment is the most important indicator that you should pay close attention to;
  7. Before making a deal, think whether it is worth it.

The situation in the banking market changes very often, so a bank that issued “the cheapest loans” can be out of the market tomorrow. It will be optimal to contact three or more financial institutions including MFIs and ask each of them for a payment schedule and requirements for borrowers. Carefully study each of the proposals and make the final decision.


In Conclusion

These are the basic rules that, in our opinion, should be followed when obtaining a loan. Of course, someone may disagree with them, but they are written only to help you. So, keep track of your expenses and good luck!

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