5 Tips To Know Before Applying For A Loan

by Terry Edwards - Date: 2007-05-18 - Word Count: 468 Share This!

Whenever you're applying for a loan, regardless of what type of loan it is, you first need to understand the basics of the process and make some initial preparations. Although the loan process can sometimes seem overwhelming, it can be made a little easier when you know what you need and what to expect. Here are five tips to help you find your best deal. 1. Get prepared before applying for a loan.

The first you'll want to do is get a current copy of your credit report. Under federal law you can get a free copy of your credit report once a year. Be sure you get one from each of the 3 main credit reporting agencies.

Take your time and look it over thoroughly. Mistakes are quite common on any credit report. It can take only one of these mistakes to cause a loan rejection. If you do find an error, take the steps necessary to have it removed. You'll find the information and steps to file a dispute in the report. It's not a difficult process, but can take a few months to get cleared up.

You'll also need to know what kind of loan you want to apply for. You can do a search on the internet for any type of loan you need, including loans for bad credit.

2. Check out the loan company.

It should go without saying that finding a reputable lender is a must before applying for a loan with any company. Check with the Better Business Bureau, as well as do a search online to find possible complaints or other issues. If something doesn't feel right to you, move on to a different lender.

3. What is the interest rate on the loan?

Pay attention to interest rates, even on small personal loans. A difference of 2-3% on the interest rates can add up fast. This is even more true on a 30 year mortgage loan.

4. What are the terms being offered?

How long is the loan for? Are there early payoff penalties? Sure, having a long term loan will give you lower loan payments, but it comes at a price of additional finance charges.

5. Comparison shop.

Take your time and look around for your best loan option. This is even more true when applying for a home mortgage or home equity loan since these loans have higher amounts and longer terms.

Find your best deal before applying for a loan so that you don't find out 2 weeks later you could have gotten the same loan somewhere else for 3% lower interest. With a little time and patience you'll be assured of getting the best loan for your situation.

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Related Tags: money, finance, loans, loan application, applying for a loan

By the way, you can find out more about Applying For A Loan as well as information on all types of banking - loans - investments at www.Banking.InfoFromA-z.com

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