8 Expert Guides about Taking Loans No One Would Tell You June 11, 2018 By: Ethan Martinez 0 Facebook 5 Twitter 0 Google+0 LinkedIn0 Reddit 0 Pinterest0 WhatsApp Viber 5Shares How to get a loan when you don’t qualify for a line of credit from a bank? Does this question sound similar? This is a very common question being asked these days. And why not? It’s hard enough being poor and paying a ‘poverty premium’ on utilities or getting rid of credit card bills. Many of us may come to meet such situations when there is no other way out aside from applying for a loan. According to the Guardian, household debt in the UK increased 7% in the past five years Most people approach banks and other similar financial institutions for a loan. But, banks disqualify them due to several reasons. Don’t fret. You have great options to borrow money. Despite your bad credit history, you can succeed in obtaining money from financial institutions similar to banks in the form of a one-time, short-term loan (less than a year) to finance your temporary working capital needs. If you find a reliable financial institution, you can get a suitable loan. A good company can help you access to various lenders and partners for different loan types and loan requirements. Based on the broker you choose, lenders will be willing to provide you a short-term loan instantly. This post sets forth eight things with some practical advice and insight to consider before taking a small loan. 1. Understand Different Types of Loans There are multiple types of small loans available. The options vary depending on your needs, the loan amount, length of the loan, and the specific terms. The most common loans available for you are the following: 1. Short term loans – You can take it for 3-12 months. 2. Unsecured personal loans – It requires no security to offer to the lender. 3. Car loans – You should apply for car loan if you want to buy a car. 4. Bridging loans – These short-term higher interest loans taken to “bridge” a period of time. 2. Know the Purpose of Loans Before making a final decision, make sure why you need loans. Do you want it to pay off your credit card bills? Is going debt-less your distant dream and you want to get rid of it? Will the loan be for purchasing home appliances or investment? Will you use the borrowed amount to enhance sales and marketing efforts? Based on the purpose of the loan, you can decide the amount. You may also borrow a little extra if you run into a cash crisis that lasts a month or two. You have to avoid going into default under the loan. Usually, every lender wants to know why and how much funding you need before lending you money irrespective of the purpose. 3. Determine Loan Amount Determine the amount of money you need. It may sound very common. But, some people are unable to decide how much money they need to borrow. A good financial institution or credit broker can let you know the amount you know based on your situation. 4. Know the Loan Tenure Ask yourself ‘How long do you want to borrow the money for?’ Remember that, the loan term affects monthly repayments. 5. Analyze the Key Terms Analyze the key terms of the loan and ensure whether applying for a loan makes a sense for you. For this, focus on the terms proposed by the lender. Compare these terms with the policies of alternative lenders. You can do this by asking the following questions: What is the rate of interest? How can the rate vary over time? How often do you need to pay the interest? Is it weekly or monthly? Are there any extra charges for the loan process? If yes, how much? In which circumstances can the lender call a default on loan? Is collateral or security required? What financial statements do you need to provide to the lender? Is there a pre-closing fee? If yes, make sure it is reasonable or not. 6. Know If You Can Repay the Loan It is the most crucial thing to consider. It’s advisable to ensure whether or not you can repay the borrowed money. You should only opt for a loan if you’re sure you can afford to repay it. If you cannot pay off, you may meet serious consequences. 7. Ensure How Lenders View Credit Before offering you a loan, lenders make the final call on whether or not to make a loan based on your risk profile and credit results. Most probably, they review credit score, credit report, and history of making payments (they try to know whether you pay off the money on time). They may also take a look at your debts and outstanding loans, scrutinize your financials and make sure it’s in order. They review all these things to determine that your cash flow will be sufficient to pay existing loans and obligations as well as the new loan contemplated. 8. Determine any Security or Guarantee Depending on the lender who is ready to offer you cash, he (lender) is primarily concerned about your ability to repay it. To the extent, he/she may ask for a security interest on your assets like property. You must focus on increasing the chances of getting a loan on favorable terms. It’s vital to avoid security interest as it can put you at risks. Final Thoughts Loans are available from many different lenders with a myriad of choices tailored to your financial situation. By finding a reliable and well-established financial institution, you can significantly increase your chances of obtaining a beneficial small loan to meet your needs. Informative Uniqueness Readibility Summary Before making a final decision, make sure why you need loans. Do you want it to pay off your credit card bills? Is going debt-less your distant dream and you want to get rid of it? Will the loan be for purchasing home appliances or investment? Will you use the borrowed amount to enhance sales and marketing efforts? 4.9 User Rating 5 (1 vote) Sending Tag: short-term loan Previous post Essential Considerations You Should Make Before Settling On a CMMS Company for Your Business Next post 5 Digital Marketing Trends Going On A Digital Forum To Boost Sales! Ethan Martinez Ethan is a Business consultant, web entrepreneur, tech enthusiast and a writer and like to write on everything that directly or indirectly related to technology and he is a guy who Love all-things-business.