What Details Should You Review Before Taking A Personal Loan?

Posted on: 8 September 2021

Are you considering borrowing some money to pay for a vacation, home repairs, or debt consolidation? If so, you might want to consider a personal loan. Personal loans are ideal for these purposes, and you can get one from many different lenders. However, before you get one, you should check the details of the loan. If you wonder what details to review, here are some important ones to learn before taking the loan.

The Payment Amount

One detail to ask the lender about is the payment amount that you will have each month. The payment amount depends on several things, including the amount you borrow and the duration. If you feel the payment is too high, you might want to ask if they can give you a longer duration. For example, a two-year loan requires higher payments than a three-year loan. You can compare loan payment amounts by duration to find a payment amount you can afford.

The Interest Rate

It is always wise to ask the lender what the interest rate is for the loan. If you feel it is too high, you could look for another loan type to use if you need to borrow some money.  

The Fees

You might also want to ask about the fees. The fees do not include the interest you will pay for the loan. The fees are on top of the interest you must pay. Many lenders charge fees to originate a personal loan, and these fees vary. You can ask the lender to give you a document that shows the fees you must pay if you take the loan. Learning the fees is important before borrowing money through any loan type.

The Collateral Needed

You may also want to ask if you must provide collateral. Some personal loans are unsecured, which means you will not need any collateral. Others require collateral, and lenders call these secured loans.

Payment Options

Finally, you may want to ask about the payment options. You can start by asking about your options for repaying the debt each month. Can you send in a check or pay electronically? Will the lender set up automatic payments for you? You can also ask if there is a prepayment penalty, which means you must pay an extra fee if you pay off the loan early.

These are the details to ask about when borrowing money through a personal loan. If you have questions about these loans or want to apply for one, talk to a personal loan office, such as Ardmore Finance.