166 Views

9 Important Things You Should Know Before Taking A Bank Loan

There are different types of personal loans a depositor can take from his bank. While some loans may not be tied to specific purposes, others may be for certain projects such as business, mortgage and car purchase.

The lender will also ask specific questions from the borrower to be sure it will not turn to a bad debt. Borrowers should understand the conditions of taking a bank loan in order to avoid running into problems.

The following are major things a borrower should understand about bank loans before applying for one.

1. Understand your preferences: Before heading to your bank, check out loan packages and see what competitors are offering. You need to be aware of what kind of loan you are looking for, the terms you can reasonably afford, and your goal for paying off the loan as fast as possible. If you are looking for a specific type of loan (auto, mortgage, personal) make sure you find the best deal for you.

2. Ask questions: When you find the loan package you are most interested in, contact the bank directly to find out upfront what the requirements are for loan eligibility. You may need to make an appointment in person to discuss the necessary materials, documents, and timelines you will need to get started on the approval process. Banks have different requirements and it will be important to know what they are upfront so you can be prepared.

3. Application: You need to apply to your bank to get a loan, stating the purpose, with enough evidence that you will repay the money.

4. Interest: Personal loan is a lump sum, which a bank gives a customer to be repaid in instalments with interest over a period of time. The loan can be for a year or over 10 years. Banks charge interest rates per annum.

5. Terms of agreement: It is very important to read all the terms of your loan before taking it. There may be some clauses, which you may not be expecting such as the possibility of the bank increasing the interest rate after taking the loan, among other things. The terms and conditions will show you the actions that the bank can take against you if you are unable to repay the loan on time.

ALSO READ  5 Tips For Finding The Best Travel Companion

6. Collateral or security: Banks usually ask for collateral before granting loans which could be landed property or other specific assets. When the bank is not asking for collateral, it will definitely ask for another form of security that could be a guarantor or the loan may be tied to your salary. You may lose your asset if you fail to repay the loan.

7. Hidden charges: The interest rate may not be the only thing you will be required to pay along with your loan. Banks may have some other charges such as a fee for processing your loan and charges whenever you default in your monthly repayment of the loan. So, it is important to know all the hidden charges. You can ask your account officer to explain these extra charges.

8. Loan restructuring: You can approach your bank to negotiate the possibility of restructuring your loan if you are not comfortable with the terms. You don’t necessarily have to wait until you have problems with the repayment; you can still negotiate when you are already paying your debt.

9. Credit card: Applying for loan may not be the only option available to you. If you need a short loan, getting a credit card may also be useful. You, however, need to understand how to apply for a credit card and have a good credit score. Depending on the bank, some may give you an interest-free credit for your first usage.

Credits: Forbes, PUNCH

Get the best viral stories straight into your inbox!

Don't worry, we don't spam

Leave a Comment

Your email address will not be published.

Latest Posts

Otedola and Dangote Attend UBA’s Award Night
Business
6 views
Business
6 views

Otedola and Dangote Attend UBA’s Award Night

PH - April 24, 2018

Billionaires Femi Otedola and Aliko Dangote were present at UBA’s award night to support their friend, Chairman of UBA Tony Elumelu. Otedola shared a photo of the…

5 Ways Women Push Men Away
Romance and Love
7 views
Romance and Love
7 views

5 Ways Women Push Men Away

PH - April 24, 2018

Falling in love and starting a relationship can be quite easy but the real task is how best to make the romance last. A relationship tends to…

Police Finally Reveals the Main Reason Senator Dino Melaye Was Arrested (See Details)
Politics
24 views
Politics
24 views

Police Finally Reveals the Main Reason Senator Dino Melaye Was Arrested (See Details)

MT - April 24, 2018

There was some mild drama yesterday as a controversial senator representing Kogi state at the National Assembly, Dino Melaye, was arrested as he attempted to leave the…

How Kebbi State Government Publicly Disregarded First Wife, Aisha Bagudu As State’s First Lady
Politics
62 views
Politics
62 views

How Kebbi State Government Publicly Disregarded First Wife, Aisha Bagudu As State’s First Lady

MT - April 23, 2018

A mild drama recently occurred on Twitter leading to a public revelation that the popular Aisha Bagudu isn't recognized as first lady.  Recently, one of the national…

Moment Nigerian Singer Mayorkun Re-United With His Dad After Two Years
Entertainment
89 views
Entertainment
89 views

Moment Nigerian Singer Mayorkun Re-United With His Dad After Two Years

MT - April 23, 2018

Singer Mayorkun has reunited with his dad in Dallas. The singer says the last time he saw his dad was two years ago when he was still…

#BBNaija Special: According to Google, Cee-C is the Most Bitter Woman in Nigeria
Buzz & Trends
64 views
Buzz & Trends
64 views

#BBNaija Special: According to Google, Cee-C is the Most Bitter Woman in Nigeria

MT - April 23, 2018

Cynthia Nwadiora popularly identified as Cee-C was tagged a very bitter and angry person following her controversial activities at the Big Brother Naija reality show which was…

How Lagos Saved N4.5bn From Non-sponsorship Of Pilgrimages
Politics
52 views
Politics
52 views

How Lagos Saved N4.5bn From Non-sponsorship Of Pilgrimages

PH - April 23, 2018

The Lagos State Government says it has saved a total of N4.5billion in the last three years since it stopped funding pilgrimages. According to it, the feat…

Afrobeat Artiste, Seun Kuti, Unveils New Album “Black Times”
Entertainment
56 views
Entertainment
56 views

Afrobeat Artiste, Seun Kuti, Unveils New Album “Black Times”

PH - April 23, 2018

Afrobeat artiste Seun Kuti has announced a new album, “Black Times“. According to him, “Black Times is a true reflection of my political and social beliefs; it…

Former Super Eagles Star, Femi Opabunmi Reveals How He Became Blind
Politics
62 views
Politics
62 views

Former Super Eagles Star, Femi Opabunmi Reveals How He Became Blind

MT - April 23, 2018

There is a photo of Femi Opabunmi trying to mark David Beckham in what look liked a set-piece situation during Nigeria’s goalless draw against England in a…

#BBNaija: See All the Prizes Miracle Will Be Going Home With After He Emerged Winner
Entertainment
68 views
Entertainment
68 views

#BBNaija: See All the Prizes Miracle Will Be Going Home With After He Emerged Winner

MT - April 23, 2018

Big Brother Naija 2018 winner, Miracle Igbokwe is still counting his blessings after winning the reality television show yesterday night. A list of all the prizes he…

Read Vimbai’s Open Letter to #BBNaija Housemates
Entertainment
60 views
Entertainment
60 views

Read Vimbai’s Open Letter to #BBNaija Housemates

PH - April 23, 2018

Former Big Brother Africa housemate and media personality, Vimbai Mutinhiri in a new post on her Instagram page, has a message for the housemates from the recently…

25-yr-old Nigerian Man Becomes Africa’s first PhD holder in National Security Strategy In The UK
Best of Nigeria
73 views
Best of Nigeria
73 views

25-yr-old Nigerian Man Becomes Africa’s first PhD holder in National Security Strategy In The UK

PH - April 23, 2018

A 25-year-old U.K based Nigerian man and Twitter @olamideDIY just achieved a great feat of becoming Africa’s first PhD holder in National Security Strategy. Sharing the amazing…

Actress Omoni Oboli Launches Feeding Outreach “Sister Lizzy’s Kitchen” in memory of Late Mum
Entertainment
56 views
Entertainment
56 views

Actress Omoni Oboli Launches Feeding Outreach “Sister Lizzy’s Kitchen” in memory of Late Mum

PH - April 23, 2018

Nollywood actress and latest author in town, Omoni Oboli, turned forty yesterday and to celebrate her new age, she spent her day with the children of Makoko…

Nigeria’s Chinedu Moghalu Appointed Head, Communications & Advocacy, Africa Risk Capacity/UN WFP
World Buzz
63 views
World Buzz
63 views

Nigeria’s Chinedu Moghalu Appointed Head, Communications & Advocacy, Africa Risk Capacity/UN WFP

PH - April 23, 2018

Chinedu Moghalu, a Nigerian, has been appointed the Senior Communications Specialist/Head, Communications & Advocacy for the Africa Risk Capacity/United Nations World Food Programme, based in Johannesburg, South…

#BBNaija’s Teddy-A Surprises BamBam on her Birthday (Photo)
Entertainment
70 views
Entertainment
70 views

#BBNaija’s Teddy-A Surprises BamBam on her Birthday (Photo)

PH - April 23, 2018

Today is Big Brother Naija’s BamBam’s birthday, and to celebrate, her one-time strategic partner in the house Teddy-A paid her a surprise. According to Olorisupergal, Teddy-A threw…

#BBNaija’s BamBam to launch Beauty Oils on her Birthday
Business
63 views
Business
63 views

#BBNaija’s BamBam to launch Beauty Oils on her Birthday

PH - April 23, 2018

Bam Beauty Oils – that’s the brand name of the beauty oil collection Big Brother Naija’s BamBam is set to launch on her birthday, April 23. BamBam…

#BBNaija’s Teddy A To Launch Clothing Line “Badman Apparel”
Entertainment
62 views
Entertainment
62 views

#BBNaija’s Teddy A To Launch Clothing Line “Badman Apparel”

PH - April 23, 2018

Hot out of the “Big Brother Naija” house, evicted housemate Teddy A is set to launch a clothing line. The musician made the announcement on his Twitter,…

Omoni Oboli Celebrates 40th Birthday With New Book
Entertainment
52 views
Entertainment
52 views

Omoni Oboli Celebrates 40th Birthday With New Book

PH - April 23, 2018

You can now add author as a title when referring to Nollywood actress Omoni Oboli who turned 40 today. To celebrate the big 4-0, the actress has…

Loading...