Skip to content

Don’t Make These 5 Loan Mistakes

2012 September 21
Posted by LoanStar

Buying a car or a home can often mean that you have to take out a loan. Since most of us don’t have thousands of dollars lying around, it’s probably safe to say that you’re going to have to go loan shopping sooner or later. Well, before you start your loan hunt, there are a few things that you’re going to want to do before applying. Since so many people make mistakes with their loans, here are five things you must look out for before applying:

#1 Watch your Credit Score

Before you even apply for a loan, there’s probably a good chance that you already know what kind of credit that you have. If your credit is bad and you can wait to apply for a loan, then by all means, wait! The lower your credit score is, the more you’re going to have to pay in interest and other fees. If you don’t know what your credit score is, the government allows you to get a free report at AnnualCreditReport.com.

#2 Not Reading Those Loan Terms

Signing a 10-page document can be rather daunting. What you’re going to find out is that you’re going to want to read the terms before even doing anything. Even if it takes you two hours to read it over, you’re going to want to make sure that you understand everything. If you ever have questions, just ask the person in charge to see if you can get answers. NEVER sign something that you’re uncomfortable with.

#3 Applying for the Easiest Loan

It’s awfully tempting to sign paperwork right now and get your loan. Well, the easier the loan is to obtain, the more likely you’re going to pay hundreds over the life of the loan. When applying for your loan, always make sure that you get a loan that takes a while to get. Banks that are strict with their lending are going to want a lot of information that can require faxing, scans and more.

#4 Hidden Costs – Are There Any?

Like the loan terms mentioned above, are they are any fees that you don’t know about? These hidden fees could include annual charges, bank charges, closing fees, commissions and payments that can balloon over time. It’s so important that you know what you’re going to be charged outside of the interest rates.

#5 Aggressively Searching

Interest rates are going to change every day. As long as you talk with five lenders and get their rates, this should give you a good idea what you’re going to have to pay in interest. If you find a great rate, be sure to lock in right away. The last thing that you want to do is pass on it and later find out that they raised the rate.

By taking your time to look for a loan, you’re going to find you should be able to find the right one for you.

This post was provided by Hannah Munson. She has help create the cost helping resource, www.howmuchisit.org. On her website, you can find the prices on anything ranging from a car repair to a home improvement project.

No responses yet

Leave a Response

Note: You can use basic XHTML in your comments. Your email address will never be published.

Subscribe to this comment feed via RSS and be notified of new responses