Loans are offered by banks, credit unions, and online lenders. There are many options available, but not all are worth considering. More importantly, some lenders offer more enticing loan products than others. Lenders will also provide applicants with different rates depending on the potential borrower’s financial situation. To find the best lender for you, you want to shop around and evaluate the types of loans each lender offers.Â
If you are availing of a cheap credit line, you are willy-nilly entering into a long-term contract with your lender, and thus you must be on the same page so that you do not receive any nasty surprises later. So here are some valuable tips for choosing the right lender for yourself.
Research your Requirements
Knowing what you want is highly imperative in the loan market. Since every borrower has a different situation, it becomes essential to find one that perfectly suits one’s specific needs. You must do proper market research on the type of lender (small or large), kind of loan product, type of interest rate (fixed or floating), options for your down payment, etc., before narrowing down your decision on a specific lender to get the secured loans.
Know Your Lender
Comprehensive research can save you from a lot of future hassle! A detailed background check of the lender must be carried out at the initial stage itself, irrespective of what you hear about him. Apart from doing a web check through reviews on various borrowers’ forums, you also procure contact details of previous clients and approach them directly. This will keep you from a lot of headaches later on.
Compare Benefits
Keep in mind that the rate of interest you will pay will significantly impact your regular budget. However, while you go for a lender offering you a low-interest rate on logbook loans, you must also note that it should not be the only factor driving your decision, as often a lender charging a higher interest rate may provide you with other advantages of greater value.
Assess the Penalties and Prepayment Costs
Getting a good deal on the interest rate is not the end. You must also find out whether the rate is a fixed or a variable one; the total interest you need to pay over the car loans tenure on your principal amount; the extra charges such as the verification charges, GST, processing fees, penalty for late payment, the penalty for prepayment, etc. that you will need to pay. Apart from these, you must also find out the rules and regulations for prepayments or paying off bulk amounts of the loan.
Beware of Marketing Gimmicks
Do not judge a book by its cover, and do not judge a lender by their striking adverts! Do not get taken away by the catchy titles of lender advertisements. These uncertain times have taught us that more than great interest deals, your best interest lies in a lender who will work closely with you to figure the best deal that suits you and will have your back when the going gets tough. Therefore, prepare your questions in advance, demand clear answers, ask for financial estimates, and get all clarifications. There should be no traps along the way.
So now you are well prepared before you zero in on a lender. The basic criteria and parameters to qualify for a loan remain versatile. So choose your lender wisely! One bad lender can cost you not only a lot of money but will turn your entire life upside down in terms of mental agony, stress, hassled life, and the list can go on and on. Thus, a little investment in terms of time and effort will save you a lot of hazards in the future. You can also take the benefit of Mwananchi Credit as Mwananchi Credit Limited is Kenya’s No. 1 provider of Logbook Loans and other related Secured Emergency Loans.