You may encounter situations that require the use of a large sum of money at a time you are not financially stable. This is the time you are forced to borrow money from all the available avenues. One may borrow from family and friends to no avail. Emergencies like road accidents or illnesses may occur and may require you to foot a massive hospital bill. Some non-emergency situations like business expansion or starting it up also need one to have money. You should not worry if you cannot get money from those close to you. One can apply for loans from the different banking institutions. We also have online lenders who can offer financial help.
All these lenders have their
terms of service which you should read before applying for any loan. One policy familiar to most lenders is the repayment of the loan in an agreed period with the said percentage of interest. Failing to honor this agreement will see you face harsh penalties like increment of the interest charged or getting blacklisted. They work with credit bureaus which monitor your repayments and rate you. Poor ratings will see you being denied access to loans. You should consider the following before applying for a loan from any bank.
Repayment capability
You should look at your ability to repay the amount you need to borrow. Are you in a situation to pay the amount in the stated period? The income generating activity you are doing will guide you in borrowing the amount you need. If you are not able to pay it at the stated time, pick the amount you can handle.
Reason for borrowing
The reason for borrowing should be the primary cause of your loan application. You should ask yourself several questions before filling that application form. Will the activity where I want to use this money generate any profit? If yes go ahead and apply. Some people borrow money for leisure purposes which end up becoming more costly to them.
Interest rates
Compare the interest rates being offered by the different banks in your area. Some banks will charge high interest rates not suitable for their customers. You should know that interest rates may differ depending on the repayment periods. Extended repayment periods have high interest rates. Borrow from a bank with fair interest rates.