You Don’t Want To Make These 7 Mistakes!
A broker may be able to help you choose the right loan, however, you must do some research before choosing a broker.
If you’re considering applying for a loan, there are certain things you should look out for. Luckily for you, we have listed the 8 biggest things that you should be aware of during your loan search. From using a dealership to get a car loan, to a bad loan costing you a valuable asset, we have everything you need to know listed below in 8 handy tips. Read on below to find out more.
A loan that is high in interest payments and fees can end up costing you more than your loan was initially worth by the time you manage to pay it off. Having a bad loan that will end up costing you more could do more damage to your finances than good once you begin to pay it back. Instead, look for a lender that will offer you competitive interest rates and that has low fees attached to their loan products.
In the case of a car loan, one disadvantage of applying through a dealership is that the interest rate might be higher than a car loan sourced through a multi partnered lender. Like any business, the dealer might add an extra cost to profit from the transaction. That extra cost is the dealer’s profit, and without that profit, the dealer might find it hard to stay in business.
Another potential negative of getting a car loan through a dealer is that your loan options could be limited. Dealers will usually only have a partnership with either one, or a couple of lenders, meaning that your loan options will be severely limited. You might also feel pressure to sign your contract quickly through a dealership, rather than having time to research different loans and lenders. This is where a broker might come in handy, as a good broker can source multiple loans and lenders and find the best fit for you.
Generally, a good loan can have a positive impact on your credit score if you make your repayments on time, every time. If you do this, you could see your credit score increase over time. However, if you miss repayments, you could see your credit score decline. Missing loan repayments can also lead to defaults being listed on your credit file. A default can occur when a borrower misses their repayments and can reduce the chance of obtaining credit in the future. If your repayments are too high due to having a bad loan, you might see your credit score fall.
If you decide to use a valuable asset as collateral for a bad loan, you could end up losing it. Whether you decide to use a vehicle or even property, it might be best to make sure that you are able to repay your loan with ease before you agree to use collateral. If you cannot repay, the collateral used may be sold by the lender to recover the money that was loaned to you. If the sale of your asset does not cover the remainder of the loan, your lender may be able to charge you for the remainder owing, on top of you losing your asset.
A loan that has bad terms can often take you years and years to repay, especially if a high-interest rate is involved. If you can only make the minimum payment each month, which will usually just cover the interest rate, then the loan itself is not being paid off. This will draw out the time it will take you to pay off your loan, as well as costing you more than the loan is worth. When looking for a loan, it usually advisable to check that you are getting the best interest rate possible, so that you can put extra towards your loan repayments and still be comfortable financially.
Lenders might be hesitant to approve your loan application if they feel that you have too much outstanding debt compared to your income amount. This could become an issue if you take out a bad loan now, and then need to take a loan for something else in the future. Taking out a loan with bad terms can lead to more debt if you cannot meet your repayments. This may happen if you take out a loan that isn’t suitable for your situation, or one that has bad terms attached to it.
Depending on your lender, getting approved for a loan could end up costing you big upfront fees. An upfront fee is a one-off fee that you are charged by your lender when you take out a loan. Generally, it can be made up of a variety of costs, such as set-up, settlement and valuation fees. However, not every lender charges an upfront fee. It is important to find out if your lender will charge you an upfront fee before you take a loan, and how much this fee might cost you.
The single biggest risk to taking out a loan is not being able to afford to keep repaying your lender. Being tied to a loan that has bad berms, high-interest rates and large fees attached can make meeting your repayments extremely difficult. If your loan payment amount is too high for you to make and you end up defaulting on your loan, you could find yourself dealing with serious financial consequences. Having your loan eat up the majority of your income can see your living expenses budget reduce dramatically. To make sure this doesn’t happen, it might help to find out exactly how much your loan payments will be and see how they will fit into your budget.
It’s never been easier to get the perfect loan. Don’t spend hours and hours researching and comparing loans, when our experts can handle the hard work for you. We offer competitive rates and simple applications that you won’t need piles of documents for. We’re also bad credit experts, so if you’ve been denied back by traditional lenders, we can help get you approved.
In four simple steps, we can find you a great loan. Call our finance experts today for an obligation free consult, where we will tailor-make a loan to suit your needs. We will then negotiate with our many partnered lenders on your behalf, before getting you approved and settled in your new loan. Contact us today to speak with one of our loan specialists for your free loan consultation.
A broker may be able to help you choose the right loan, however, you must do some research before choosing a broker.
A broker may be able to help you choose the right loan, however, you must do some research before choosing a broker.
A broker may be able to help you choose the right loan, however, you must do some research before choosing a broker.
A broker may be able to help you choose the right loan, however, you must do some research before choosing a broker.
Our vision is to make it simple and easy for every Australian to get the funding they need to achieve their big life goals.
National Home Loans Group Pty Ltd trading as Tiger Finance | ABN 57 168 971 346
Tiger Finance Credit Representative: Kiara Patricia Halley | Credit Licence: 468465
*Interest Rates: Conditions, fees and charges apply. Interest rates are subject to change and will vary. We cannot guarantee that the interest rate advertised on our website will be the one offered to you. Interest rates offered will be dependant on your situation.
*Consolidating high-interest personal loans and credit cards into a lower-interest home loan may result in significant savings on interest for some consumers. However, this solution may not be suitable or accessible to everyone.
*The approval timeframe is varied. Approval time is subject to change depending on your circumstances or loan type. Processing times may be subject to your lender.