So you want to get a loan? That’s probably a good thing. Taking out loans is often a sign that you’ve got big plans. Some people use them to become better educated, to increase their earning potential, to update their living situation, to get married, to expand their business, and so many other worthy reasons.
But you’ve got to learn about the lending process and find out all of the options available to you if you want to get the best possible loan. If you just take the first offer that slides to you across a table, you might end up with an expensive loan that costs you thousands or ten thousands more than necessary over the course of repayment. Nobody wants that. But how do you look for a loan, and who are these companies who want to give you money anyway?
Loans generally come from traditional and nontraditional lenders. We’ll start with the nontraditional because this is the one you’re probably less familiar with. Nontraditional lenders tend to come from private equity sources, or organizations that pair financiers with borrowers in unique ways. There are a whole host of internet based lending companies, like mrlender.com, which have appeared in recent years. It can be dizzying for someone who is just becoming aware of this industry!
Don’t be alarmed. Not all of these lenders will work for you. In general, the people who have the most options when it comes to borrowing money are those with good credit. It’s worth taking a couple of months, if you can possibly delay borrowing the money, to improve your creditworthiness as it pertains to the expectations of lenders. Once you’ve done that, you can start shopping around in earnest.
Look for companies who offer the lowest interest rates and fees to people in your credit range. Because there is a lot of competition in this sphere, you’ll find that you can save money if you shop around. Some alternative lenders use a Peer-to-peer system, where private individuals lend money to other private individuals, bidding on their contracts in a reverse auction system (the contract goes to the lender who offers to fund it at the lowest interest rate). Other companies are based around the money of private equity funds, and will have terms all their own.
If you want to go the route of the traditional lender, you can start a bank account or use the bank you’re already affiliated with. Local credit unions and community banks sometimes offer great deals to their members which can not be matched by corporate banking systems. In other instances, corporate banks with their international scope will be of great service to you. They have so much money, that it’s easy to lend to people, even those without sterling credit.
At the end of the day, you’ll have lots of options available to you, no matter what your credit history. Look around and try to understand your regional industry, and its relationship to international lending. In the end, you’ll find the option that works best for your situation.
Harry says
If you have a solid plan, getting a loan can be the best move you can make. Excellent post!
Harry recently posted..What is Debt Settlement, and when is it Useful?