Things to consider when taking a loan

Have a need? The bank has a loan.

Today, you can get a loan catering to virtually every need that arises. Home loans, education loans, personal loans, consumer durable loans, wedding loans, vehicle loans, used car loans and home improvement loans are the most common.

Out of all, personal loans are the most convenient because the customer does not have to explain why he needs the money. He can use it for whatever purpose he requires. The most exciting part is that, for most of these loans, often no guarantor, security or collateral is required. Within 72 hours, the cheque arrives at your doorstep. What's more, in some cases, you don't need to have an account at the bank.

Personal loans are a great method of getting the money you need quickly and efficiently. However, they may not always be the best loan for your particular situation.It is also important that you conduct your own research on various types of loans you may be eligible for. This will assist you in making informed decisions while ensuring you get the best loan available. There are a few things to consider before you make the decision to apply for a personal loan. Here, we tell you what to look for when opting for a loan.


Is there a need ?
First thing to consider - do you really need them ? So ask yourself if there are there other sources of funds you can get money for your immediate needs. Such as an advance from your employer or a loan from family or friends. You’ll want to make sure that that is your best option for your financial situation. After reviewing your options, if you still find that a personal loan is the best means of regaining fiscal control and health, and If u cannot find any other cheaper means then go for it


Loan amount
You’ll need to decide on a practical loan amount.try borrowing the minimum possible amount, Beware of lenders that encourage you to borrow more than you need or more than you should. That is a red flag, warning of a potentially unscrupulous lender

Make a List of Loan Lenders
Once you feel that u have a need for loan then create a list of loan lenders then try to get Rate for you and neccassary details for u , since every bank can differ by their rate of interest Always explore the loan option with your bank first. Being a customer, you may get various benefits like minimum documentation or waiver of other fees.
The most important thing you can do as a consumer of loan products is to shop around and get several preliminary loan quotes for your consideration.
I suggest that you obtain 3 or 4 offers. You can then examine and compare the terms, rate, fees, and all other pertinent information about the loan product, and the lender, at your leisure and in the comfort of your own home Shop around for the lowest possible rate .The competition is intense, so you may get somewhat better deals if you do your homework.

Compare Interest Rates Offered to You

The interest rate is one of the key elements that determines the mortgage amount you'll pay each month. So it should also be a key decision-making factor when you apply online for a mortgage / home loan.

Monthly reducing and yearly reducing
Choose a bank loan where the interest is calculated on a monthly reducing basis as against an annual reducing basis. You end up paying less when the interest is calculated on a monthly reducing basis. So the principal amount you repay this month will be deducted from next month's interest calculation

Fixed versus Floating
The two most common loan products available are fixed rate versus floating rate. Fixed rate means that you agree on an interest rate that does not change through the life of the loan, whereas, an Floating means that rates and monthly payments can change, depend s on market factor Deciding on which way, to see if one of these products may be right for you. But, proceed with caution, and understand all the risks, alongside any potential benefits.

Know your processing fee and other type of fee
If you are taking a loan amount then a processing fee is 1% or 2%, then you will have to pay a processing fee. So keep low processing fees in mind when looking for a loan of a high amount. If the bank says they do not charge any processing fee, probe some more. Do they charge an administration fee? Is it high in comparison to the other players? Do they charge an application fee?.

Loan Types:
There are several standard loan products to look for, including 3 year fixed,4, 5year fixed, etc .the best place to start, is to obtain quotes for a for all year fixed rate loan, and then go from there.which u think relatively safe. In general, the longer the duration of the cash advance, the higher the money u pay . and u will know , the longer the duration , the less u will pay for less delayed payment

Pre payment of loan
Check for the prepayment penalty if you plan to repay the loan before the term ends. This is all the more important if the loan is of a long tenure and you are looking at prepayment. Look out for other benefits too. For example, scheme where the last Equated Monthly Installment was forfeited if you paid all earlier installments on time.

Read the contract
Read the contract very carefully. If anything makes you uncomfortable, ask all the questions you need to before signing a payday advances contract. Show the document to others, and even a lawyer if need be. Some lenders try to rush you through the process so that you don't have a chance to read the fine print. Don't fall for this tactic; let them know you'll take the time to examine the contract before you commit to taking payday loans

reputation
Run a check to find out more about the lender's reputation. If you find complaints about their conduct, look around for other sources for cash advances. As the buyer, you have every right to gather facts about pay day loan companies you're considering doing business with.


Is there a url where u can find details ?
Ensure that there is a url where u can find details where lender will giive you a complete breakdown of all amount paid and the remaing amount paid , and other details . And make sure the page where you input your details is secure. ensure that they have full contact details including a working phone number on the site. Give them a call and ask a question or two about their payday loans to see how they respond

Get Everything in Writing When you apply online for a loan, it's absolutely critical that you get everything in writing. This is good financial practice in general, For example, if a lender promises you a certain interest rate based on your qualification and credit score, ask them where it says that in writing.Lenders are required to provide you with this information within a day or two of your mortgage application. rates, terms and fees possible for your individual situation.

Insurance protection

if you get sick, have an accident, or made redundant.can u get payment protection insurance for your personal loan which covers your repayments

reference :
Top 10 Things to Consider on Home Loans By Tom Levine at: http://www.mortgagesexplorer.com/10667.php http://www.rediff.com/getahead/2006/aug/22loan.htm