Whatever the reason for taking out a loan there are several important factors that must take into consideration before signing on the dotted line. Before we delve into these, it is important to point out that shopping around and comparing what lenders have to offer is vital. For those seeking comparison in Finland, please go to: http://Nopsacredit.fi
Paying back the loan early can cost you money: Many lenders will charge a fee if you want to pay off your loan early. Whilst it may seem counterintuitive that a lender would penalise you for paying off the entire debt early, don’t forget that they will be missing out on the interest you would have paid if you’d stayed for the full term. The size of the fee will depend on how much you borrow and which lender you borrow from.
Look out for hidden fees: Always read the terms and conditions, i.e. ‘the small print’, before applying and/or agreeing to a loan. Some companies will charge administration and loan arrangement fees, whereas other may charge you penalty fee if you make a late payment. Although it may seem like a chore, never ignore the T &C’s and make sure you go through them with a fine tooth comb. It can also be handy to speak to someone from the lender with any questions you may have.
Variable repayments?: More often than not, unsecured loan rates will remain constant, however with some secured loans there may be variable rates, meaning that your monthly repayment could rise at any time. This obviously isn’t a situation anyone would like to to find themselves in so be sure to inspect the rates fully before agreeing to any loan.
Is a loan the right choice?: If you are looking borrow a small amount or over a short term then a credit card may be a better option than a loan. Many companies will offer 0% credit cards, which means you won’t have to pay any interest on them for the timeframe that the 0% deal exists (usually 12 or 18 months).
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