4 Important Points to Investigate Before Submitting a Loan Application
22 Oct 2020
Loans can become helpful in all sorts of situations. From taking care of an unanticipated financial need to buying a home, there are lenders who are willing to help. Before you start filling out loans in Ottawa, Toronto, Scarborough for whatever type of loan you need, spend a little time learning more about the lender. Here are four questions that will help you get started.
How Much Income Do You Need to Have Each Month?
Most lenders have income requirements that applicants must meet. In many cases, the minimum monthly income required is lower than most people think. That’s especially helpful for someone who need a short-term loan but happens to live on a fixed income.
Remember that the income may be salary or wages from a job, some type of government benefit, or even money from a pension plan. As long as the sources add up to a monthly amount that meets or exceeds the minimum required by the lender, submitting an application may be worth the effort.
What Types of Income Does the Lender Find Acceptable?
Some lenders will consider a wide range of income sources. You already know that money from a job will qualify. There are also lenders who are happy to work with applicants who have income from other sources. For example, did you know that it’s possible to obtain online child tax benefit loans based on how much your benefit comes to?
If you’re not sure that your income source qualifies, reach out to the lender and ask. While many lenders provide comprehensive lists of the types of income they accept, others provide broad responses online while offering more specifics from those who want to know.
What Sort of Interest Rate Will You Pay?
Any loan that you secure will require repaying the balance borrowed plus interest. You want to find out what type of interest rate you can lock in. There’s also the matter of understanding how that interest rate is applied to the current balance.
Some lender make this easy by providing an online tool that allows you to calculate the amount you will pay over the life of the loan. If you find the total to be reasonable, do consider filling out an application. If not, check with a different lender.
What’s the Plan For Repaying the Loan?
Your goal is to lock in repayment terms that fit reasonably well into your household budget. To that end, see who will allow a term that works for you. Also pay close attention to the amount of each installment payment. As long as it’s affordable, you’ll be fine.
Remember that making payments on time is important for a couple of reasons. First, the lender will report the activity to the major credit bureaus. Second, you build a strong relationship with the lender. If both parties are happy with the way the loan goes, obtaining another loan from the same lender will be a little easier.
If you could use a loan, do take the time to investigate the options carefully. Doing so will increase the odds of finding a lender who provides what you need and makes it easy to repay the debt.