7 Factors to Consider When Applying for a Loan
Applying for a short term loan could be the solution to your financial problem if you have a job and can afford to pay it back. The loan application process has been made easier with many lenders now offering their loans online. The approval process is faster and you can borrow the same amount as when you borrow from the bank. The following are 7 factors to consider when you are applying for a loan.
- Check the Requirements
The first thing you want to do is to check the requirements for the loan. The most basic requirement is that you must be a US citizen and be at least 18 years old. There is also a credit score requirement you need to meet. In a loan comparison search engine, you can easily see whether the loan requires a good, fair, or average rating. The short term loan lenders will check your credit history which can affect your credit score slightly.
- Loan Amount
Next, check whether the lender offers the loan amount you need. You may be having in mind to borrow $5,000 or $15,000 and you want to make sure that the lender offers the loan amount. The lender will send a reply on whether he approves of loaning the amount you have requested for. The approval of the loan amount depends on your ability to make the repayment promptly. If you get approved, you should expect to receive the funds in your account as fast as one day to two weeks.
- Interest Rate
You want to compare the interest rate when looking for a loan. If you have a good credit score, you will be able to qualify for a loan with a low-interest rate. However, there is no need to be too enthusiastic in looking for low-interest loans. As long as you can afford it, you should apply for it. You want to make sure that you have an adequate credit score when applying for the loan. This will ensure that you don’t get charged with an exorbitant interest rate.
- Loan Fees
Besides, you need to check the fees that come with the personal loan. Most personal loans offer a discount when you choose autopay. There will be fees like origination fees which is deducted from the loan amount. The late fee is charged when you make the repayment past the due date. An unsuccessful payment fee is charged if the payment did not go through successfully. A discharge fee is charged when you pay back your loan in full early.
- Loan Term
The loan term is an important factor to consider when you are applying for a loan. Many personal loans offer a fixed term from 15 – 30 years. Some lenders allow you to make modifications to the loan term according to your convenience. You can ask the lender if they allow making repayment earlier or later than the loan term as well as how it can affect your interest rate.
- Processing Timeframe
You may also want to consider the timeframe of the processing and releasing of the funds. If you are in urgent need of funds, you should find one that can release the funds in 1 day. If it is not urgent, you can look for a p2p lender as they usually release the funds in 2 weeks. You can visit other websites to read reviews from other customers. Customers will often leave reviews about how smooth the loan process goes and how fast they receive the fund.
- Suitable Repayment Schedule
You should choose a lender that offers a suitable repayment schedule. Some lenders will give you the option to postpone payment when you are jobless if you have a record of making payment on time for a certain period. Some lenders offer you the ability to make changes to the payment date when necessary.