Consumer Loans
It seems that everyone has a consumer loan that is tailor made just for you – lenders know exactly what you need and they have it just for you. How do you know if the loan will be good for you and your special circumstances? You can compare all the loans if you know what to look for when you compare.
Since lenders seem to know what you need it’s a good thing to just start comparing the top lenders. You can see how to sammenlign forbrukslån, or compare the loans themselves once you know what to look for. Below are some ideas for you to look at to do just that.
Things to Look For
- Loan Amount – the first thing that you want to do is compare the loan amounts themselves. You can’t compare the loans if one is a few thousand dollars more than the other one. You need to compare apples to apple and compare the same amounts.
- Interest Rate – this is where the loans will start looking different. Not every lender will have the same interest rates even on the same amount that they are lending you. Some lenders will look a little more closely to your credit history and some will ignore some little dings on the credit report. This all effects the interest rate that they will be charging you.
- Monthly Payment – your monthly payment will also possibly be different from one lender to the next. You need to see what is included in the payment – it should be at least the principal and interest. The lender might also add other fees such as an origination fees and administrative fees. Check out all the fees and make sure that the payment is accurate before you sign any papers.
- Total Monthly Costs – if you are doing a home loan, or mortgage, make sure that you know what else is included in the monthly costs. Many times, you will also have taxes and insurance added to your monthly payment. These are normal and they can be different depending on the insurance quote that you choose to go along with. Taxes could be different, too, so check to make sure that you are paying the taxes for your particular piece of property.
- Upfront Costs – you will have other costs on some loans, especially a home mortgage. You might have to bring in a down payment, closing costs, and other costs that will be revealed to you. Make sure that you are prepared for all these costs so that you will not be completely shocked at the total when you are signing papers.
- Amount of Cash – this leads to how much cash that you should bring to the closing. If you are doing a personal loan or something similar, you might not have any cash to pay. If you are doing a home loan or auto loan, you will likely need to bring something.
Budget
You will also need to look at your budget to see how all these costs and payments will affect the monthly amount that you will need to pay. For some things, such as a home or car, it is a necessary expense and you will need to find a way to make it fit your budget. If you are just trying for a personal loan to help get caught up on bills or something similar, you need to see if it is going to be cheaper to add a little to your monthly payments to get those bills paid, or if you truly need a loan to help you get them paid. Either way, it is going to cost you a little more each month and you will need to figure out how to make it fit your budget.
Your budget is important and people who have monthly budgets seem to do better moneywise than those who don’t. If you are doing a monthly budget, you will see how much you spend each month and how much you need to save. This helps you when you need to take out a loan for necessities later on.
As a part of looking at your budget, you should calculate the five-year cost of borrowing. Most people will decide to refinance after about five years, so this is a good way to calculate your costs of borrowing. Use a spreadsheet to track all your costs that go along with the loan and how much you will pay during that time. This will help you when it does come time to refinance, you will know what to look for in costs and will know if the new loan will actually save you some money.
What to Know
- Same Features – the first thing you need to look at is the features of the loans that you are comparing. Do they all have the same type of interest rate, such as an adjustable rate mortgage or fixed rate? You will need to know the difference and how it will affect your monthly payments.
- Timeline of When You Received Your Quotes – if you got all the quotes on the same day, you will have nothing to worry about. If you waited a good amount of time between each quote, you will have different interest rates since those can change daily. You want to make sure that you are comparing similar items, so make sure that the interest rates are similar.
- Loan Estimates Contain All Costs – some lenders will not add your taxes and insurance into your loans and expect you to pay it separately. Make sure that all your quotes are the same or make sure to add those costs to your monthly payment. Doing so will make sure that you are still comparing the same things.
- Similar Costs for Taxes and Insurance – you need to make sure that all the lenders use similar costs for your taxes and insurance. This could be a little different, but if there are huge differences, you might look again. They should be very similar, only differing by a few dollars here or there.
- HOA Fees – does the monthly payment that you are looking at include HOA fees or other homeowner fees? If not, you need to include these in your estimates because they are a factor that you have to deal with. Not every home has these fees, but many newer neighborhoods will have them.
Conclusion
When you are looking for a new loan, especially for a big purchase such as home or car, you need to compare more than one loan to get the best offer for you. Many times, the loans will be very similar, but you want to see how the lender treats the extra costs that go along with the loan. This might be where they differ the most – and where you might be able to negotiate a little to get the fees that you want.
You will want to make sure that this big purchase will fit in your monthly budget, as well. If you are buying a home, it is probably something that you need to fit into your budget because it is a necessity. If you are looking for a personal loan, you need to see how it fits into your budget and if you really need it or not.
