Online loans, including those in installments, are such a widespread financial product that they can usually be taken without a deep thought and good assessment not only of your creditworthiness, but also of the loan parameters.
This attitude will not save you from making mistakes, which are often duplicated by previous experience. It is worth minimizing the risk of any problems with the repayment of the loan and know what mistakes to avoid.
Let’s not limit ourselves to just one offer
When deciding on financial support in the form of an installment loan, you must remember that the non-bank market is quite developed and you can find really many different offers on it. Choosing the first better loan – because a friend recommended it or offers the amount that interests us – is not a sensible step.
Perhaps, thanks to spending a little more time looking for the perfect lender, we’ll find a more favorable offer, better suited to our financial situation or simply cheaper. A loan ranking or comparison tool can help . Especially the second option is beneficial if you want to quickly get knowledge in a nutshell and set all the parameters of interest to you.
Loan costs are not always the most important thing
For many people, the best installment loan is simply the cheapest. Two simple moves on the loan comparison engine will allow you to rank the loans by total cost. Is this enough to choose the right one? Of course not, but naturally the amount of loan fees matters. However, it is worth considering why the costs are low. Often, in exchange for lower fees, the loan company will require something else – high earnings or very good credit history.
In this case, you also have to take into account that costs for late repayment may be higher, and the loan company may not offer an extension of the repayment period, rescheduling or the possibility of taking advantage of a loan holiday. These parameters are also very important.
Choosing the longest repayment period
A long or even very long repayment period is a great convenience. For many borrowers, it means above all a lower installment that can be tailored to the household budget. Although loans for 12 and 24 months are the most popular, you can also find a much longer repayment period.
It is good to use the option of paying off the liability for up to 5 years, but this solution is not without flaws. First of all, it is a long-term impairment of your creditworthiness, which can effectively deprive you of the option of using another form of liability. In addition, no one is able to fully predict their financial situation in such a distant future, not to mention the fact that choosing the longest repayment period right away deprives you of the option of using an emergency exit – e.g. extending your repayment schedule.