When you are in need for cash urgently, you will be compelled to get a loan to solve your problems. There are a few options available, however, you need to ask yourself a few questions before committing to a loan.
What is the interest rate?
When getting a loan from banks, usually the fees are much more attractive and lower compared to other sources. However, the process involves a lot of documentation and paperwork.
On the other hand, get a loan from licensed moneylenders is a fast and hassle free process. However, their rates are higher than banks and other established financial institutions.
What happens if you default on your loan?
It is important that you enquire on the penalties and fees involved if you you default or are not able to pay on time. Ensure that you can afford the fees before committing to a loan.
Is there any collateral required?
Generally, there are no fees involved when taking a personal loan from any finance companies such as banks or moneylenders. To be on a safe side, always ask before taking a loan or you will end up losing more than what you can afford.
Are there any fees involved in loan application?
Different finance establishments practice different arrangements. While some do not require any fees, other do require a fee to process your loans. Always check beforehand to understand what they offer before taking up a loan to prevent any unforeseen extra expenses.
Finally, always consider carefully before getting a loan as the amount might be more than what you can afford and will cause further stress and problems for you.