Financial Questions You Should Ask Yourself Before Taking Out a Loan

Thursday, January 19, 2017, 6:00 AM | Leave Comment

When you borrow money, you are expected to repay that money on time without fail.

If you make payments late or miss them completely, you could be saddled with additional fees and interest.

Therefore, it is important that you ask as many questions as needed to ensure that you actually need to borrow money and that you borrow from the right lender.

financial questions you should ask yourself before taking out a loan

  • How Much Interest Am I Willing to Pay?

    A secured loan comes with interest rates as low as 5 percent or less for those with good credit.

    Those with poor credit may pay 10, 15 or even 20 percent interest on a secured loan. Unsecured loans may come with an interest rate of 10 percent or lower for those with good credit and may be unavailable for those with poor credit.

  • Do I Need the Money Today?

    If you need the money today and don’t want to worry about a credit check, it may be worth looking into a payday loan from a place like Payday Express.

    This type of loan is perfect for those who need roughly $1,000 or less and can pay the money back in a matter of days.

    Payday lenders will deposit the money directly into a designated checking account within hours of applying, and a loan decision is often made instantly or within minutes.

    Therefore, it is very useful for those who are experiencing certain emergency money issues that require them to have the money that very same day.

  • Who Will I Borrow From?

    Just as there are many different types of loans, there are many different types of lenders.

    Online lenders may offer lower rates because they have less overhead, and they may be willing to work with those who have bad credit or no credit.

    However, if you are looking for custom loan terms, it may be best to ask a family member or friend for money.

    Those who have poor credit but don’t want to pay high interest rates may benefit from a 401k loan.

    If you’re looking to borrow money from the bank, especially when it comes to getting an auto loan, it would be best to work with a credit union.

  • What Happens If I Don’t Repay the Loan?

    Very few people borrow money with the intention of not paying it back. However, a job loss or other unexpected event could make it difficult to repay your loans.

    Make sure that you know where to turn for help to either get additional financing or to discharge your debt if you truly can’t pay it back in a timely manner.

Ideally, you will find ways to pay bills or manage other expenses without going into debt. However, if you absolutely need to borrow money, make sure that you have a plan to repay the debt and understand your options in the event that you can’t pay it back.

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