Avoid These Mistakes When Applying For A Loan Online
Applying for a loan is a major decision. Here are some of the most common mistakes to avoid when applying for a loan.
Mistakes To Avoid When Applying For A Loan
Not Checking Your Credit Score
As you are aware, your credit score is a major factor in determining the terms of your loan. So, before you apply for a loan, first check your credit score. If it is bad, you should consider holding your loan application and work toward improving your credit score. Taking the time to improve your credit score, would ensure that you get a more favorable term.
If, however, you are in urgent need of a loan, you can consider applying for an allotment loan through our Access Loans® program. Since we do not check credit scores, you have a higher chance of getting approved, even with a bad credit score.
Not Shopping Around
Different lenders offer different types of loans and terms. Some may offer higher interest rates, while others may entice you with low interest rates but high annual percentage rate (APR). With so many options, it’s important to research various providers and their offerings, then choose the one that offers the best terms instead of settling for the first provider you find.
Not Examining The Fine Print
When you review your loan documents, you will find details about the interest rate, whether it is fixed or variable, the repayment schedule and amount, but there are more details that you should be aware of. You should read the fine print of your loan terms so you know whether there are additional charges, such as service charges, prepayment charges, stamp duty, and so on. These costs will surely affect the amount of your loan. Make sure to read and ask the right questions.
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Applying For Multiple Loans Simultaneously
If you are in dire need of money, you may have considered applying for multiple loans and assume that one of these institutions must approve your application. That may be true, but doing so will drastically hurt your credit score because all the providers will conduct a hard check on your credit, thus lowering your score. Having one provider conducting a hard credit check may slash a few points off your score, but with multiple providers, your score could drop up to 20 points.
Lying About Your Income
You may be tempted to misrepresent some information to make your loan application more attractive. However, doing so, will surely have major consequences. First of all, this is considered fraud, so you could face criminal charges. Second, if the lender finds out about your lie after you have received the fund, they could demand immediate repayment. If, however, the lender never found out, you could instead have trouble with the monthly payment because you may have gotten a loan that is beyond your financial capabilities.
Learn more about our Access Loans product.
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