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Loans a common phenomenon

Needs are endless and resources are limited. It is impossible to fulfill our all needs with the available resources; hence loans are required by each of us at some stage of our life to meet the needs those of course cannot be funded by our meager savings. Certain projects that need a large amount of finance can be met through loans, as postponing the needs would mean paying more at a later stage. The foremost question that comes to mind when one contemplates taking a loan is how to go about taking a loan and that too without many hassles. Loans best deals are not distant dreams if you follow the following tips.

How to avail the loans best deals

Getting a loan is not a big deal in the present scenario. There are numerous financial institutions and moneylenders who are ready to lend any amount that you need. You can avail loans for virtually any purpose. The availability of purpose specific loans and general nature loans can be viewed at various websites and two worth mentioning websites are,

Being a borrower you are always in a precarious position to take a loan because you would like to borrow money and at the same time would like to minimize the monthly repayment. Getting a loans best deal is, therefore, of paramount importance. A few aspects, which you should keep in mind, to be a smart borrower are:

(i) The funds required must be thoroughly worked out. Borrowing more than what is really required must be avoided.

(ii) Your repayment capacity should be precisely calculated before hand, keeping enough space for the escalation of the prices. The loan that you take should not become a burden for you at a later stage. This would in turn give you a bad credit rating.

(iii) You must evaluate the type of loan, secured or unsecured loan, which would suit your requirement.

(iv) The most import aspect that needs to be looked into is the interest rate that is being charged. The interest rates that are broadly categorized in two categories viz fixed and floating need to be compared. You should have the knowledge of calculating the interest that you will pay. Free interest calculators are available on various web sites. One such site can come handy for this purpose.

(v) While taking a loan the repayment and pre-payment options offered must be scrutinized at length prior to the finalization of the loan.

(vi) Look out for sops attached to the loans.

(vii) Look for the best lending source.

(viii) Loans with least documentation should be preferred. Hasty decisions should be avoided.

Fundamental Principles for loans best deals

There is wide range of multi-purpose loans available in the market but the question is which loan is the best for you. There are a few parameters, which can be the guiding factors for rating the loan deals as best.

Interest as we all know is the additional amount that is paid on the actual loan amount. In

fact, it is the amount that the lender charges from the borrower for the service of lending. Of late several new trends have emerged in the market. Loans are offered at various interest rates. Loans that attract higher rate of interests are generally unacceptable unless the need is urgent and for a short period. Fixed loan rates are a much safer choice for customers if financial market is volatile and gives an indication of rise in lending rates. Floating rates of interests make a loan attractive and are useful if the economic indicators of the market show long run stability.

The loan policy of the loan provider must be checked especially for the early repayment guidelines. Loans that don't attract any pre-payment penalty are a better viable option.

Read the loan fine print and confirm that there are no hidden documentation charges or high processing fees. Loans that are not taken directly from the lending institution generally have such hidden expenses that are never spelled out at the out set. These charges translate into a considerable amount for big loans.

Loans that are offered in the traditional financing mechanism with some down payment at the initial stage and equated monthly installments (EMI) must be preferred as on such loans interest is calculate on a reducing balance basis. It is a much better deal than the loans having flat interest rates.

How to get the loans best deals

A borrower's prime target is to get the best loan deal from the market, as it would certainly help you save several thousand dollars. Why should higher interest rates be paid One needs to remember that there are several loans offers which would be attractive and even acceptable but the gain that lies in picking up the best offer.

Try a variety of loan sources. Before finalizing the loan you must explore the market and be more informed about the terms and conditions of the various loan sources such as banks, brokers and other prime lending agencies. The ideal way is to get a reference from friends who have already taken a loan. The alternative way would be to go for online shopping for loans. This would give you a large number of options to choose for a loan that suits you the most.

Secure a loan at the lowest possible rate of interest. Much can be bargained with the moneylenders as far as the interest rates are concerned. Interest rates vary form loan to loan and type of loan and can even differ for different customers. Short term unsecured loans are charged higher interest rates whereas long term loans interest rates are in the range of 5 to 7 percent and can be considered reasonable.

One way for getting a loan at an ideal interest rate is to go for loans at the fag end of the month. Many lending agencies in order to achieve their set targets tend to offer better bargains in the later period of the month. It is here that your bargaining skills can get you a loan at low interest rates, with minimum overhead charges and least complicated procedures.

Keep a good credit rating by having an excellent repayment track. This would help you in convincing your financer and in the bargain to get the best deal. Get the best quote under these conditions and then evaluate it vis--vis other offers.

Avoid approaching brokers, as they are agents being paid by the lenders and their costs are passed on to you in terms of higher interest rates and processing fees/documentation charges etc. Its always better to approach a moneylender of your own if you really need a best loan deal.

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