Essential Questions to Ask Your Money Lender

One of the biggest problems that people have in today’s world is money. More precisely, we have so many wishes that can’t turn into reality because of a lack of money. Still, committing to a loan is a big responsibility. Unfortunately, people do not spend enough time thinking about the right decision.

We can highlight one of the most common mistakes that people make. They urgently need money for some reason. Making important decisions while you are under pressure or in a hurry is bad. It doesn’t truly matter how quick you need to find a certain amount of money. You need to find a way to get that money back in a certain period.

The best reason to commit to a loan is to boost your revenue. For instance, you plan to start a business soon. However, you do not have the necessary initial capital. If this is the case, your business plan truly needs to be good. You need to cover all the aspects of your business before deciding on this move. In this way, you can be sure that additional problems won’t arise.

Finding the best-licensed money lender is the next obstacle you will have to pass. You need to be careful when choosing one. Some of them are working illegally and borrowing money from these people would be a huge mistake. However, even those that work legally might not meet your expectations and requirements.

Let’s imagine that you found the licensed money lender that seems legit to you. Well, everything will probably look fine at first glance. However, there are certain things you should know before signing the contract. Fortunately, you came to the right place to find out the essential question to ask your money lender.

Enough talking; let’s find them out together.

Which Type of Loan Should I Decide On?

Well, this is the first question that you should ask. The most professional ones will always try to provide you with the best possible experience. Indeed, you can find those that only want to take your money. Because of that, the meaning of this question is huge.

Your potential partner won’t give you the right answer if you do not give him the necessary information. There are different types of loans such as interest-only loans, fixed-rate loans, etc. The task of your potential “partner” will be to explain to you the differences between them. He also needs to tell you all the advantages and disadvantages of each one. After you hear them, it will be easier for you to make the final decision.

Tell Me More about Down Payment

Well, some common answer to this question would be “around 20%”. Yet, do not get surprised if you hear different numbers. The down payment might be around “3%”. This depends directly on your qualifications. Indeed, it is also important to hear all the cons and pros as well.

Tell Me More about All the Costs

Some money lenders will try to trick you with some hidden costs. In this way, they want to make their offer a bit better. Well, this is the situation that you can only expect from less-professional clients. The best ones will tell you everything you should know about the costs.

For instance, each loan requires some lender fees. Despite that, you should know that there are some third-party vendor fees as well. This includes things such as credit reports, title policy, appraisals, etc. Logically, some of these things are not always required. However, every person should know about all of them.

Do not wait for the last moment to talk about them. Ask about all the costs before you even decide on a certain type of loan. In this way, you can put everything on a piece of paper and calculate everything.

What about Interest Rate and Annual Percentage Rate?

You have probably heard about APR or annual percentage rate. However, we are sure that you do not know how to calculate it. The process of APR calculation is a bit complex. It includes the interest rate and other lender fees. Of course, not all the licensed moneylenders will offer you the same APR.

We need to highlight certain things that you should know about the Annual Percentage Rate. Talk with a lender about the index, maximum annual adjustment, the highest rate, etc. By knowing all these things, you will know which type of loan is the best for you.

Does the Prepayment Penalty Exist?

Well, this question is directly connected with the law. In some states, prepayment penalties are no longer legal. However, if it is allowed, you should know certain things about it. This type of penalty allows the licensed lender to get six months more of unearned interest. This happens only if you pay your loan off early. In some cases, these penalties are in effect for only 2 to 5 years of the loan. The best lenders will always give you a clear answer to this question.

Check Their Experience and History

Okay, this is a factor that we should all put into consideration. Let’s imagine that you want to buy a product at an online shop. Logically, you will read the reviews of previous customers. If a huge number of them are positive, you will decide to purchase the product easier.

Things are not different when we talk about licensed money lenders. A good example of a long tradition of satisfied clients you can see at kbbcredit.sg. Many people say that they are the best money lender in Singapore. A huge number of satisfied clients is something that will surely attract new customers.

We only provided you with one good example of what you should look for. We recommend you check the moneylender’s reviews before you even contact him.

How Much Time Do I need to Fund?

The answer you will get to this question is different from one place to another. We can only say that loan processing time is usually around 43 days on average. Determine the turnaround time with your lender and check if there are any anticipated obstacles. These obstacles could lead to hold up closing which is surely not in your interest.