Three Things To Look For When Considering A Consumer Loan

Posted on: 14 August 2017

Personal loans can help you to purchase a vehicle, pay off debt, or take care of emergency expenses. Choosing the right loan takes a bit of research and work. Here are some tips you can follow to help ensure you get the right loan to meet your needs and budget.

Total Cost Of The Loan

When you take out a consumer loan, you'll be expected to pay back the principle plus interest. In some cases, there may be other additional fees to pay as well. To fully understand what it will take to pay back the loan, you should ask your lender for the total amount repayable. This is the total expected cost of the loan. However, you'll also want to ask about any additional fees there may be, such as late payment fees or penalties for paying off your loan early.

Required Credit Score

There are loans available for people with good, average, poor, or no credit, and knowing what credit score is required for any type of loan you apply for can help to prevent disappointment. You can ask your lender what the typical required credit score might be for a loan, or for some lenders, you can check online to see the expected requirements. Remember that every time you apply for a loan, you receive a hard inquiry on your credit report, which can impact your credit rating down the road. Applying for loans you are more likely to get approved for can help to reduce the hits your credit report takes and the number of applications you fill out.

Payment Due Dates

Some lenders offer flexibility when determining your loan payment due dates. It may be easier for you to make your monthly payment in the middle of the month as opposed to the beginning when rent or mortgage payments are due. Ask about flexible payment dates so you can better budget your money and help to ensure you don't fall behind on your loan payments. If you currently have a credit card, mortgage loan, or other type of credit through your bank, you may even be able to rearrange your payment dates for your different accounts to better balance your finances.

Be sure to determine how much you can afford to take out so you can keep your loan payments manageable. Ask lenders, such as at MainSource Bank, what the minimum monthly payment will be, and choose the loan that fits your current financial situation.