It might seem like lenders hold all the power, but the decision making power is in your hands as well. Watch out for predatory lenders who offer “easy” loans with unreasonably high interest rates or unrealistic pay back periods. Pay close attention to fees and interest rates when you go to apply for a loan. Make sure you prepare and search for different options to find the best interest rate/loan for you.
It’s a good sign if a lender is asking you a lot of questions because it means they want to make sure you are making a financially responsible decision.
As a responsible borrower, you should be looking for four pieces of information from your potential lenders:
- Terms & Conditions: terms include the interest rate, monthly payment requirements, associated penalties (such as prepayment penalties), or special repayment provisions.
- Interest Rate: pay attention to the interest rate and whether it is fixed or variable.
- Fees: there may be application fees, closing fees, late fees, or other administrative fees.
- Client Services: make sure your lender is someone you want to work with long-term and that they treat you with respect.