Making Informed Decisions Before Choosing A Loan

Have you been financially strapped for cash lately? Maybe it’s time to consider getting a loan to help bridge the gap between your paychecks. Or maybe you’re ready to purchase a new car or home. While there are many different types of loans on the market, one thing’s for certain—you need to understand what you’re signing. Once you sign your name on the final paperwork, there is no turning back. Here are few things to look for before you sign and other ways to ensure you’re making the best, informed decision.

Don’t Give Out Too Much Information On Other Existing Accounts  

If you’ve gone to your bank to apply for a personal loan or line of credit, your loan officer will ask for several pieces of documentation, including:

  • *Proof Of Income
  • *Bank account verification
  • *Social security and driver’s license cards
  • *Utility bill information or proof of residence
  • *Documentation of titles being used for collateral

If your lender needs bank routing numbers or other credit card or account numbers and specifics, ask why. Most of the information that they need to approve you for a loan is found within your driver’s license and social security number. A lender that asks for extensive personal information for installment loans should be approached with caution. Be careful with signing paperwork that requests access to your personal account information. This could be used to make withdrawals from these unrelated accounts should you default on your payment.

What Are The Loan Term Rates?

If you’re looking to purchase a new or used vehicle, one of the first things you will ask the salesperson is how much your monthly payment will be? To determine the payment and establish the auto loan or lease, several things are taken into consideration, such as:

  • *The term or length of the loan spread out over months.
  • *Amount of your down payment, as well as trade-in value from current vehicle.
  • *Sales tax.
  • *APR or annual percentage rate.

It’s important to look over the final documents to see if there are any fees that aren’t being discussed with you and the salesperson. This could be stipulations about mileage or condition of the vehicle if you’re leasing it, or how soon the first payment will be due after closing. To be sure, have someone else or your attorney look over the sales or lease document prior to signing the final paperwork.

Total Amount Needed At Closing

When closing on a home mortgage, you should know ahead of time about the exact amount needed to finalize the deal. While this number can change due to fluctuations in interest rates and insurance estimates, it shouldn’t be a large, significant difference. If the amount is not what you expected, bring it up to your lawyer and to the realtor. In some cases, a realtor will add extra fees at the last minute. Included with your mortgage approval paperwork should be a good faith estimate. This is a document that breaks down where your money will be going to. It includes all of the fees and portions of your money and where exactly it will be distributed to.

Don’t Sign Blank Documents 

Are you looking to obtain a payday or cash advance loan? This offers a great way to get some fast cash in your pocket to pay for emergencies and unforeseen circumstances that may arise unexpectedly. While most cash advance loans are a safe and effective option when it comes to making your dollar stretch until your next payday, be sure to read over the fine print. The interest rates can be higher than a traditional loan, and there may be some fees for processing as well as late charges. Stay informed on what they are and make sure that you can afford to repay the loan before signing it. Don’t ever sign blank documents either. Make sure that the agent or loan officer signs the documents before you do. If you’re uncertain about what you’re signing, ask to have a legal pro look over the documentation first.

Obtaining a loan of any kind can be a strenuous process. Take out the stress by making sure that you know exactly what you’re signing before you close on the deal.

Author: Calvin Brycen

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April 2018
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