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Finance

How to Get a Loan

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It is a well-known fact that human wants are insatiable and the means to satisfy them are hardly enough. So if you find yourself desiring a loan at some point in your life, know that this is totally normal.

In fact, a loan is a great way to finance a major project or to make that onetime expensive purchase that will leave holes in your budget if done from your regular earnings. The best part is that you can easily get a loan nowadays and this is what this article wishes to address.

Whether you are getting a loan from your bank, credit union or some lender you found online, the steps are the same. Let’s get to them:

  1. Run a check on your finances

You don’t just wake up and go for a loan, you need to decide the amount you are getting. You will use this amount to calculate the monthly repayment sum that can cancel out the debt eventually. This monthly repayment has to be something your budget can handle. This will ensure that you don’t take a loan that you will not be able to pay back. You can use any of the online personal loan calculators to figure out the monthly repayments if numbers are not particularly your strong point.

  1. Know your credit score

Your credit score will go a long way in determining if your loan will be approved or not and the amount that is available to you if approved and the interest rate. This is because the lending body also checks your score to be sure that you will be able to pay back in due time. In the case where your score is too low, you should take steps to better your score before seeking a loan because loans on low credit scores can attract high fees and interest rates.

  1. Consider your options

Certain loans require that you get a cosigner, some others do not. Also, some loan requires collateral (secured loan) while some others do not (unsecured loan). There is also the issue of deciding where to get the loan. These are some options that are available to you that you should consider first. For instance, if you are considering a secured loan, do you have suitable collateral? What loan type are you settling for?

  1. Choose a lender

After taking the time to consider all of the points above, picking a lender should be a piece of cake. Once you have chosen a suitable lender, fill out paperwork, collect the loan and make a conscious effort to pay back as agreed.

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Sean Jacobson

I'm Sean, a former HR and business consultant providing you insights into the business world for Leader to Leader.

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