Loan lenders – A Gateway to Credit or Debit?

When a person /institution is in bad credit or in need of some extra cash for construction, commercial purposes, education of their kids, to buy a new car, loan lenders are sought for.

Loan lenders:-

Loan lenders are people who work on their own or as part of a financial institution. They have instant cash through which they can help people or any commercial institution. People invest in these personnel, so that they get high interests for their investment. This cash, a loan lender acquires through some people, acts as a boon for others who are in need of money.

Clauses for the people:-

When you are in need of a loan & on the outlook for a loan lender, you should take into account certain factors, which definitely you should not overlook.

  • Experience of the loan lender: – there are loan lenders who are waiting out there to rip you off by high interest rates. But there are honest & highly qualified personnel on the flip side. They charge only moderate interest rates. A person who is new to the world of loan lending should not be preferred under any circumstance. Experience of the loan lender is a major factor as far as borrower is concerned.
  • APR: – Loan lenders who offer low APR can be relied upon. The annual percentage rate of interest is calculated on the basis of the amount of the loan & the repayment term of the borrower.
  • Repayment period: – If the amount is high then the repayment term will be longer. You will be paying the loan in EMI’s or monthly installments. If the EMI is high, then your loan can be paid off much earlier.
  • Mediator fees: – In some financial institutions, a mediator might be present, between you and the lender. You will have to pay processing fees to the mediator.
  • Online application: – The recent trend is applying loan online. Most of the financial institutions opt for this. This option is more convenient for you as it is done in the comforts of your home. But you should be careful there are no loopholes in it, as the EMI is directly deducted from your account.

Clauses for the loan lenders

  • Financial background of the borrower: – The borrower should have a relevant job & a steady monthly income. In almost all the applications of the lenders loans, job & income of the borrower should be mentioned.
  • Collateral security: – Lenders who are aware of the financially unsteady background of the borrower, should check the availability of anything collateral like a car, house or any other financially beneficial item, which the lenders can take, if there is any failure in payment of the loan.

Types of Personal loans:-

1) Construction loans:- Construction loans are taken when you are in need of huge amounts of money for constructing a house or an office. The interest amount will be high in construction loan.

2) Home equity loan: – When you are in urgent need of cash for house renovation, improvement or any other needs concerning your house & family members you can apply for this. This is of low interest rates. Education loan comes under this category.

3) Commercial loan: – This option is sought for when you are planning to expand your office, there is less cash flow, buying another property/equipment etc. It can be applied in the name of an individual. Generally applied online.

4) Auto loan: – when you are in need of any vehicle you can apply for this. You should physically meet the auto loan dealer. Online is not possible.

5) Payday loans: When you are in urgent need of money, which you need on that day itself, you can opt for payday loans. They can be applied online only. The cash is immediately added to your account but with high interest rates. If you don’t pay back in time, you will get an overdraft in your account, as the EMI is deducted from your account automatically.

You should do quite a lot of loan lenders’ shopping, if you want to acquire a hassle free loan.

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