Are you finding that you need money to go towards something – a personal event (such as a wedding), remodelling your home, emergency circumstances (e.g., repairs), or just simply paying off credit card debt? Are you then finding that you don’t have enough money in your bank account to help you and, to make things worse, you might possibly be needing that money rather urgently?
The solution couldn’t be any simpler: All you need is a loan.
A loan is when you request money from your bank, which you will eventually pay back along with any interest. This may sound like a simple thing to do, but just like the terms and conditions of an agreement or contract, it’s a lot more technical than you’d think. There’s a lot you’ll need to take on board before you seek out a loan for yourself, so read this article to understand everything before you make a decision.
Considerations – Stage 1
There are some early considerations you’re going to need to comprehend before you can apply for a loan. For the sake of convenience, these have been divided up into two stages.
For stage one, you will need to be thinking about, letting alone looking into, the following:
- Your credit score – It’s a very good idea to know what your credit score is before you even try applying for a loan. The higher your score, the more likely you’re to be accepted for the loan itself.
- Deciding how much you wish to borrow – This is painfully obvious. However, the amount of money you want in the loan depends on how much you believe you’ll be needing, let alone what the money will be going towards. You’ll certainly be needing to carry out some research before deciding a definitive sum for the loan, so take on board all those costs!
- Repayments – After you’ve been given the loan, you’ll be repaying it on a monthly basis. It’s vital that you know how much you’ll be able to pay each month so, if need be, look for a loan calculator to help you with the calculations.
- Getting a quote – After determining how much you want to borrow and how often you’ll be able to pay it back, you can then ask for a quote. This means that this is the last price where an asset is traded.
Considerations – Stage 2
Even if you’ve decided how much you wish to borrow, you need to take into account whether you really need the loan or not. Is it a dire need? Is it absolutely essential? Think about this carefully, let alone if you can pay it back later on.
You should also consider if you’ve been rejected for a loan in the past, as this could mean a repeat incident may soon occur.
Another factor is that you may not receive the advertised interest rate, which will depend on your own financial circumstances. Also, depending on the loaner, you may be charged any additional charges and fees, meaning you’ll have to pay these as well.
It must also be noted that there’s no single type of loan. In fact, there are at least four, so you’ll have to conclude on which you feel is best for you after you compare them. These minimum four are:
- Unsecured – These are not tied to an asset, such as a car or home.
- Secured – These are tied to an asset as a method of security for your bank should you not be able to make your repayments.
- Guarantor – Ideal for a person with poor or limited credit, if you’re not able to make the repayments, another person who you’ve selected (either a family member or a close friend) will be able to do so.
- Payday – Issued for a short term and with high interest rates, you will need to pay these back sooner; they’re named as such as they’re available until you are paid for your line of work. If they’re not paid on time, there will be more consequences than the other loans.
Applying for the Loan
After all the considerations have been accounted for, you’re ready to apply for the loan itself. To do so, you’ll need to fill out an application form. The details you’ll need to supply can vary depending on your bank, but this list comprises the main ones you’ll mostly see:
- Full name – Yes, even your embarrassing middle name (if you have one, that is).
- Contact details – Your home phone number, a mobile phone number, and an email address.
- Date of birth – You cannot be accepted for a loan if you are below eighteen years of age.
- Home addresses – This will be your current address and any old ones you might have had.
- Status of employment – Are you employed? Unemployed? Self-employed? Retired?
- Your employment – Your job title and your employer.
- Income – Both household income and your salary.
- Financial commitments – This can include a mortgage of some sort.
- Living costs – Including rent, food, travel, and bills.
Found yourself needing a large sum of money but you’re strapped for cash? Then a loan looks to be your saviour in this situation. Before you even apply for one, you must consider how much money you need, while also figuring out if you’ll be able to pay it back rather straightforwardly and without difficulty. While it’s also essential that you decide if you really do need the money, you also need to select the loan that you feel is the right type for what you want to put it towards.
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This was our guide to assisting you with applying for a loan. If you want more help with this subject, or maybe even another unrelated one, contact us today at Count.