Everyone was in the situation of lack of money. One of the best solutions to this problem is to take a loan. But at first, you should know the rules to avoid mistakes.
Loan rules everybody should know and follow:
#1 You Must Learn Every Detail Before Taking a Loan
Firstly you must know what type of credit you need. Then you need to compare interest rates in different banking companies because even a small difference between the interest rate of any banking company can be very very significant in the total credit sum. Also, compare processing fees and redemption fees.
#2 Loan Must Be Available for You
The loan to income ratio must be affordable.
You've got to know your limitations. For example, monthly payment for your car mustn't exceed 15% of your net monthly income, and monthly payment for your personal credit mustn't exceed 10%. Monthly consumption for every credit mustn't exceed 50% of your net income.
Ignore future earnings. Base your calculations on what you earn right now.
If you will not make payments on time, it may impact your credit rating and will interfere to take loans in the future for other purposes. In such a situation borrower must call beforehand to inform the lender that it's impossible now to make a payment. One of the solutions for late payments is to extend the allowable period to make a payment.
#3 Make Your Period of Using Credit as Short as Possible
Acquaint with the interest rate when you take a loan: the loan rate and amount will depend on the chosen loan term (the longer the term, the higher the interest). Borrowers tend to take out long-term loans because the equated monthly payment is lower and they use tax benefits. But it's a misguided strategy because they pay huge interest in the end. Tax credits reduce the effective cost of credit, but they still incur costs. If you can't get more than the effective value of the loan, it should be used to prepay the outstanding amount.
The best option to pay off your loan as quickly as possible is to increase your monthly payment. Monthly payments should increase every year in line with the increase in income, which can significantly reduce the loan term. For example, by increasing your monthly payment by 10% every year, you can reduce a 25-year loan to 10 years. This is a good way to use an annual bonus or tax refund.
Fast Loans
If your financial problems are light, for example, it's simply not enough money before the payday cash advance you can use online fast loans. It's very convenient and easy, especially with Triceloans quick loans online. You don't need to provide a lot of documents about personal information and it saves your time because you will spend little time to finish all the process.
Only one year ago the personal loan balance in the USA was over $151 billion dollars!
Credit Insurance
Loan insurance is necessary if the borrower takes a large sum. So, the lender will take over your credit, if for example you will have an accident and your credit will not be paid. Banks usually try to nudge customers into buying a reduced-term plan that covers the outstanding amount.
However, a regular term plan is the best option because it continues even after the loan is repaid or if the borrower moves to another lender. In addition, credit-related insurance policies are usually flat-premium plans. But regular payment plans are the best way to insure yourself
- Change the lender if you need it.
Last year consumer credit increased almost 6 percent. It means people need trusted lenders more and more. Look for the most profitable lenders' conditions and interest rates. Banks often offer lower rates to new customers but charge higher rates to existing customers. Watch for changes in interest rates. If another bank offers a better rate, it makes sense to change the loan.
Choosing another loan is more beneficial if it was done at the beginning of the loan term. It is not as beneficial if the loan is at the end of tenure. The same applies to the early repayment of the loan. The sooner you do this, the better it will be. Read the terms and conditions carefully to avoid unpleasant surprises.
- Always attentively read conditions of crediting.
Often the text with credit conditions is very long and it is boring to read all the information. But you must know every detail to avoid different unknown and nasty things. Remember, that your credit score is very important.
- Inform your family.
You should inform your family about your decision to take a loan, especially if you are the only one who earns money. Also if you have some financial problems or you have long-awaited wishes to buy something – your relatives can provide financial assistance and you will avoid possible credit problems.
- Don't take a personal loan for investment.
Investments are very unreliable, especially if we talk about equity investments. It's a very high level of risk. To take a personal loan for investments is possible only if you are sure that your investments will in fact yield much higher returns than personal loan installments and aren't involve high risks.
- Make it a habit to be disciplined in payments.
Maybe you will need more loans in the future, for example, to buy a long-awaited thing or when you simply do not have enough money before the payday cash advance, so it is very important for you to have a good credit rating, which directly depends on your creditworthiness.
If you use your credit card recklessly, you may be tempted to pay only the minimum sum due. Paying only the minimum amount will increase the interest component by the total amount due, and you will pay the larger sum in the end. Therefore, it is very important to pay your payments fully and on time.
To conclude all the text higher, we can say, that these rules are very helpful and recommended to read before making such a responsible decision to take a loan. Also, this is a key to finding all the answers to questions, that you are interested in and a way to save you precious time.
