Before you use the company and a non-bank loan
Do you want to take advantage of the loan company’s offer? Regardless of whether it is a short-term loan or a long-term installment loan, remember about several rules for safe lending. This applies not only to the choice of the company whose services you intend to use, but also allows you to avoid the debt trap.
If you applied for a loan from a bank and the bank refused to grant it, then you must have a reason for that. Is it safe then to look for loan companies and use such a loan? First of all, such a loan is much more expensive than bank loan, and secondly, you need to be absolutely sure that you will have something to pay it off with.
Before you choose a loan company
Before you choose an offer from a specific loan company and sign a contract with it, check the lender and the services it offers. This can be done in many ways, even by using the help of the internet. In this way you will eliminate entities that are not subject to any supervision and those that have negative opinions.
Watch out in particular for “pseudo loan companies” that pretend to be social loan services and whose main purpose is to “pull out” money for expensive premium phone calls.
Consider the loan twice if the lender requires you to visit a notary and transfer ownership of the property. Before you sign the contract, read it carefully, because you may lose the collateral!
The next step, after checking the company, is to familiarize yourself with the TOTAL loan costs. These are all the costs that you will have to pay to get the loan.
And nominal interest is not the only cost of the loan. Currently (July 2017) loans and borrowings may not bear interest higher than 10% (up to four times the NBP lombard rate). The nominal interest rate limitation obviously applies not only to loan companies, but also to banks and credit unions.
In addition to interest on the loan, there are other costs. The most frequently charged are: commissions, preparation fees, administrative fees, consulting fees (!) And insurance.
The application fee may be charged by the company, but if it refuses to grant a loan, it MUST pay the fee back. By the way, if the loan company requires such a fee, then we should give up its services.
Any entity that grants us a loan is required by law to inform us of any costs associated with the loan and must provide the amount of the APRC.
Let’s not be afraid to ask and even demand clear answers about the loan
The final stage is to read the contract terms very carefully. Unfortunately, few people read contracts and regulations before signing. In the contract, we pay attention to:
- loan interest rate,
- additional fees,
- security requirements
- and costs related to debt service.
If any issue is not understood, ask and ask for clarification. If the company is unable or worse, does not want to give precise answers, then give up its services! You do not have to sign the contract immediately, you can read it online (for online loan companies) or ask for it to be delivered to your home.
If you have no doubts as to the loan company, the terms of the contract and your own financial capacity to settle it on time, you can sign it.