Guide on How to Choose The Right Lender
There are many options now when it comes to a lender. But there are some criteria you should consider to make the right choice for further win-win relationships. The main factors you should pay attention to are customer services, time in business, rates, fees, and credit checks.
This article will help you determine the lender that suits you most in your particular case.
Customer Services
The more services a lender provides, the more consistent and stable practice he has. Choose the lender that offers checking or savings accounts, different types of loans, and credit lines. You may also want to have a conversation with potential lenders to learn more about their products. It helps you estimate the level of service provided.Time in Business
Time in business shows the stability and reputation of the lender. This is an essential feature, especially if you are looking for long-term loan decisions. It is better to choose a lender that has been successfully working for at least a period of time that is equal to the term of your future loan.Interest Rates
Each lender sets its own APR range. Compare the interest rates that lenders offer and choose the one that suits you most at the moment. However, be careful. Sometimes financial products with a low interest rate may have limits or unsuitable terms, and credit lines with a 0% APR promotional period will turn out with high rates if you do not pay off your balance till the end of the set period.Fees
In addition to interest rates, you should also pay attention to fees. The processing fees differ from lender to lender and, in some cases, can reach up to 20% of the loan amount. Sometimes loans with low interests and high fees can cost more than high-interest loans with no fees. You should also pay attention to late fees and prepayment penalties to avoid unexpected costs.Credit Checks
Traditional financial institutions such as banks and credit unions always provide hard credit checks and pay attention to the information from your credit report. If you have a bad credit score, it can be a challenge to get a personal loan from a bank. Moreover, hard credit checks lower your credit score by a few points. If you have some problems with your credit history, try to choose an online lender that provides only soft credit checks. But be ready to get an offer at a higher APR.More Advice to Make The Right Choice
Here are a few more pieces of advice that will help you choose the lender that suits your current needs.
Avoid Deceptive Offers
Remember that almost all lenders are primarily financial institutions that make money. Too attractive offers, as a rule, are fraught with many pitfalls, for example, hidden fees. Read carefully the terms and conditions of your loan agreement to avoid unexpected unpleasant consequences.Contact Your Bank First
Many banks offer some benefits for current customers, so you can get some advantages in this case. Contact the bank you use for your personal banking needs and compare their offer with the other lenders on the market.Ask About Money Transfer Terms
For example, if you need a fast loan, get ready that most traditional lenders will not be able to provide you with an instant money deposit. In this case, you should consider online payday lenders.