Getting a loan is one of the easiest ways to fund whatever it is you need. There are a lot of money lenders now a day, each with their own “specialization.” A word of caution, however, is to make sure that you only borrow from licensed money lenders and undergo a strict scrutiny of their different loan programs.
What Is the Credibility of the Money Lender?
It is not unknown to anyone that the number of money lenders available for borrowers increased in the span of how many years. There are licensed money lenders and “normal” lenders who can provide loans. Before you start contracting a credit with anyone, make sure that you are only transacting with a credible money lender.
There are notorious lenders out there who make it easy for you to get the loan, but never really deliver the amount that you need. Moreover, some lenders ask collateral from you and transfer the ownership of the insurance to themselves. Before you even fall into any of this circumstance, here’s what you should do:
- Only approach a licensed money lender such as banks or famous lending institutions;
- In case you decide to obtain a loan from an individual, make sure it is still with a licensed money lender.
- Ask for their Identification.
After establishing the identity of the money lender, check the experience these lenders have. Make sure that they have the right amount of experience, or else you can be in big trouble. If they lack the knowledge, they may be unaware of how the business operates.
What Types of Loans Do They Offer?
If you’re about to get a loan, make sure to approach the right money lenders. As there are so many different types of loans you can get, such as a hard money loan, a secured personal loan or even a short-term loan, it is best to speak to the right professionals to help get your financial worries under control.
Although several lenders can cater to your needs, there are more money lenders out there who might be better at providing what you need. There is nothing to be ashamed about when it comes to wanting to improve your financial situation. It is best to speak to the right people, who will be able to give you all the information you will need to get back onto the right track. Whether you are looking to buy a new house, there is a loan for this. If you are planning on buying the boat of your dreams, there are boat loans that you will be able to inquire about. By speaking to specialists, you’ll know that you are in safe hands and won’t have to worry about struggling financially for much longer.
There is a trend these days that more licensed money lenders are starting to specialize on just one particular loan category, while there are still others who offer general loan programs. Make sure to ask what the specialization of your chosen money lender is. This is important primarily because:
- Specialized money lenders are accustomed to the type of loan you obtained;
- They have experience in that category, meaning they know the struggles that may incur;
- It creates a better understanding and expectation between the moneylender and borrower; and
- Their loan programs could be flexible and more adaptive to the category you choose.
As much as possible, you would want to get a favorable loan program. An excellent way to do this is by obtaining your loan from money lenders who have their specific category. This way, your credit can be by what you need.
What Is the Period of Your Loan?
There are two aspects which you should look at when talking about periods. The first aspect that should be discussed is, how long until the money lenders can fund you the loan? In answering this question, you have to look at the following:
- The period which it takes for them to approve your loan;
- The actual availability of their resources so they can fund your loan; and
- The urgency or immediacy of the credit you need.
Depending on the urgency of your situations, there are some loan applications which may take as short as days to approve but as long as weeks or months to accept. Take into consideration the necessity and immediacy of the loan you need. Personal, home or family loans usually takes a long time.
The second question that you should ask is, how long is the loan available? Each loan program has its terms, and some can be as long as 5 to 10 years, while some can last for only 1 to 2 years. Knowing the period of up until when they can provide the loan is essential. It determines whether it can work with the timeline you have.
Before you choose which loan to get, make the following determination:
- Up to how long is the credit available?
- Ask for the money lenders short and long-term loan programs.
- Ask how do they release the loan. Is it on a one-time basis or an aggregate amount on a monthly basis.
What Is the Interest Rate Applicable to Your Loan?
One method which most money lenders employ is providing an enticing and favorable interest rate. These rates determine how much more of the original loan do you have to pay, and some money lender offers a meager interest rate or a very high one. But the standards these lenders can give you also depends on several factors such as:
- The collateral you offer to secure the loan;
- The risk they have to assume in case of non-payment of debt; and
- The credit rating you present them.
You also have to ask your money lenders the applicable interest rates in case you fail to pay your loan at a particular time. Depending on your agreement with the lenders, you can pay on an installment or onetime payment basis. However, both these types of payment have penalty clauses in case you default with paying your loan. The penalty clauses usually provide an interest penalty on top of already existing rates.
You can avoid incurring penalties by making sure you pay your loan on time. However, it is crucial that you also ask these questions to your money lenders:
- How long are they going to give you to pay the loan?
- What is the interest rate in case you default on your loan?
- Is the penalty applicable to every period you defaulted, or is it only a one-time payment?
No matter the size of the loan you need, make sure to observe the questions provided in this article. It can help you ensure success on your loan application, and find the right money lenders for your use and disposal.
About Dona Dimaculangan
International Guest Blog by Dona Dimaculangan of Moneylenders Singapore, the top provider of customer reviews of legal money lenders as well as comparisons of personal loan offers in Singapore. For more details, visit us at moneylenders-sg.com.