Getting The Best Loan
Look around. With the number of credit companies growing steadily, the chances of being duped also increases. There will always be companies who will try to lure you with dazzling promotions like low interest rates and get the money quick schemes in order to cash in on the trend. However, how many can truly deliver your expectations? Instead of signing up with the first creditor you speak to, look around first to check your options.
Ask. You’ve finally managed to make a short list of your prospective loan providers. You come in and ask to speak with one of the brokers, who then proceeds to discuss to you what they can offer and how. Sadly, you lost him somewhere after he said hello – what do you do? Ask. Don’t be afraid to pipe up and clarify certain items that you didn’t quite follow. For all you know he was telling you that the interest rate would increase by 10% per month! Here are more questions you should not forget to ask:
- What is the current interest rate? Is it the lowest for the said date or week?
- Is the interest rate fixed or adjustable? If it is adjustable, how will your prevailing rate and loan payment vary?
- What is the loan’s annual percentage rate (APR)?
- What is the inclusion of each fee?
Check the papers. The existing rule is that the more points you pay, the lower the interest rate. Points, by the way, are fees that are paid to the lender with each corresponding loan. Check out your local newspaper for more information about the rates and points being offered.
Negotiate. For starters, have the broker list down all the costs and fees related to the loan. After that, try asking him if he would be willing to lower down or even waive one of the fees or agree to get lesser points. Keep in mind that every penny saved means a lot. Don’t be afraid to haggle because more often than not, brokers offer different rates for the same services so that they may be able to pocket the difference as commission.
Lock it in. Once you have ironed out and settled your concerns, you should request a written lock-in from the lender. The document should include the rates agreed upon, the number of points the lender is set to receive as well as the effectivity period of the said