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  1. 1. Getting a loan is not an easy task. Here is an articlethat talks about the various aspects that need to be considered before applying for a loan.loandirectorysg
  2. 2. You do not apply for a loan on a whim There are a lot of factors toconsider before putting yourself in an irreversible situation You have toremember that once you put your signature on that contract, or at leastafter the usual 3 day grace period, there is no turning back The inabilityto repay ones loan could lead to major changes in ones standard ofliving Secured and unsecured loans are the most popular loansavailable in the markets A secured loan is usually taken out againstcollateral
  3. 3. The process of acquiring this kind of loan is much quicker especially forthose who have bad credit history and low credit rating Since there isalready a tangible asset that can be defaulted to if the loan remainsunpaid, finance institutions give much lower interest rates for securedloans But if you fail to pay, you will have to be ready to give up yourproperty An unsecured loan on loandirectorysg the other hand is usuallygiven to people who have good credit history as well as high credit scores Moreover, the rates tend to be lower in the case of loans that aresecured But you will need to look at other factors as well once you havedecided which loan type you will be going in for
  4. 4. Interest Rate: Even if this is one of the most important details governingour decisions, you should not be blinded by faulty advertising Rememberthat in the case of low interest rates, the payment duration will also belonger So calculate if you will be saving anything If the interest rate isreasonable compared to the loan term, then go ahead and sign thosepapers Loan Term: A lot of loans have fixed terms, usually 15, 20, 25 orat most 30 years Some lenders will enable you to change the term, ifthey think you can pay the whole debt off within half the time
  5. 5. Check to see if early repayment is an option that is open to you Askyour bank if they offer opportunities to pay them back earlier or later, andhow the change will affect your interest rate as well as monthly payments Hidden Charges: Make sure you read the fine print before finalizing adeal There might be charges you are not aware of, especially for homeequity mortgages Do not ignore the long list of penalties and fees thatyou might be liable to pay Floating or Fixed Rates: If you availed of afixed rate loan, then you know exactly how much you will be paying everymonth
  6. 6. Chances are your parents had a fixed rate loan on their first mortgage,because it was the only one available to them during their time However,floating rates soon emerged in the world of loans and mortgages This isalso called an adjustable or flexible loan in some cases, as the interestrates vary annually or quarterly, depending on the terms of the loan In agiven year, you could run the risk of paying more interest or you could befortunate enough to pay a small amount
  7. 7. loandirectorysg