Getting a loan is a big deal. It’s not simply an act of borrowing and lending, it is one that involves a great many conditions, fine details and a host of fees that you didn’t even know existed. While loans can get you out of financial troubles, they can also dig a hole much deeper than the one you started with if you’re not careful and well informed.
When it comes to getting a loan, there is a very easy way you can keep yourself informed and well out of the way of financial distress. It all starts by asking the right questions to the one person or firm that has all the pertinent answers you need- your lender.
- 1 Questions to Ask
- 2 What types of loans do you offer, and what are the interest rates?
- 3 Which loan is best for me? Why?
- 4 How much will I have to pay?
- 5 What other fees do I have to pay? What are these fees for?
- 6 What documents do you need from me?
- 7 What are the risks, and how can they be mitigated?
- 8 If I need money now, will it be available to me?
- 9 How long will it take to process my loan application?
- 10 Is there someone I can contact anytime I need to?
- 11 How do you keep my personal information secure?
- 12 More than Just Questions
Questions to Ask
To avoid the risks and complications that come with getting a loan, it’s best to ask those who provide the loans. But what should you be asking? Below are some of the questions that you’ll want to know the answers to before getting a loan:
What types of loans do you offer, and what are the interest rates?
Of course, you have to know all that the lender has to offer before you make a decision on which loan to take. Don’t just take any loan that the lender suggests, as this may have been suggested only because it is more advantageous for the lender. Get to know all the loans offered and their corresponding interest rates. As a follow-up, you could also ask them how they came up with those interest rates.
Which loan is best for me? Why?
Aside from possessing your financial information (which you need to provide), lenders and bankers often have the knowledge and experience to know which loan is best for your specific situation, so it would be helpful to get their opinion. But don’t just take one lender’s advice- ask several lenders and compare and of course, assess your own situation to see which loan really suits you best.
How much will I have to pay?
While the interest rate may give you an idea of what you’ll need to pay monthly, it won’t tell you how much you’ll be paying overall. Knowing the exact total amount you need to pay will help you get some perspective. It will help you see whether or not you’re paying too much and if other loans, despite having bigger interest rates, may be better choices for you.
What other fees do I have to pay? What are these fees for?
In some loans, you might need to pay additional fees when certain conditions are not met. Learn ahead what these fees are and what they’re for to avoid overpaying for your loan.
What documents do you need from me?
Loan applications need several documents in order to be processed. Make sure you avoid delays and submit all requirements by asking your lender what these are.
What are the risks, and how can they be mitigated?
Various types of loans involve various types of risks, and various types of businesses and industries are also exposed to varying levels of risks. Your business may be at risk because of existing debts, or your industry may be slowly going downhill. Ask your lender what these risks are and what solutions may be applied to avoid these risks.
If I need money now, will it be available to me?
In cases of emergency, you need to be able to rely on your lender to provide you with the finances you need. They must be able to assure you that cash is available on hand when you or any other borrower needs it.
How long will it take to process my loan application?
It may take a few days to a few months to process your application depending on several factors. There may be other borrowers who must be prioritised and documents may still be needed or assessed. Try to get the best estimated time and keep in touch with your lender in case anything else is needed from you and so that you’ll be constantly updated.
Is there someone I can contact anytime I need to?
Again, it’s important to always keep in touch. You need to inform your lender whenever there are changes in your salary, your debts or your employment so always ask for someone you can be in constant contact with.
How do you keep my personal information secure?
The financial information you provide lenders is private and must be treated as such. Make sure your lender understands that and doesn’t sell your information to outside parties.
More than Just Questions
The answers to these questions that your lender gives will help you make your final decision, but these shouldn’t be all you take note of. You have to take note of not just what they answer but how they answer. If they answer you using technical terms you don’t understand, or seem to just make things more complicated and confusing for you by the things they say, chances are they are not being truthful. If they seem dismissive or worse, annoyed by your questions take those as huge warning signs and don’t go through with it. Choose a lender who will answer you in a straightforward and professional manner, one that will graciously accept and answer all your questions. They may encourage you to choose a certain loan option, but they shouldn’t be pushing you or keeping your view limited to lead you in only one direction.
Choose your lenders wisely and ask the right questions. No matter what type of loan you’re getting, be it a mortgage loan, cash advance loans, instant approval loans or other types of personal loans, the fact remains that information is the key to making the best decision, and this information should be provided by your lender in the best manner.