In the world we live, many people cannot provide basic living conditions with a regular income. The costs are varied: utilities, kindergarten bills, tuition fees, rent, and so on. More and more often people find the way out by taking the credit in the bank or asking for the loan from their dearests. But are there other possibilities to get the money you desperately need? Of course, there are.
The decision to take the loan is always difficult. It is not easy to give up half of the salary for the credit payments. But, sometimes there is no other way to financing some bigger projects, like resolving the housing issue, buying a car, paying the school bill for your smart-head son, or even taking your family on a deserved vacation.
Therefore, let’s start from the beginning. The most common way is a bank loan. That is the most reliable way to get the money with a signed contract, the defined deadline you have to return it, what are the interest rates, and other things. This also has disadvantages.
For example, if you take 5,000 USD on repayment of 10 years, you will probably return an additional 2 thousand, not even being aware of it. The reason for that is an interest rate, but also the possibility that the value of certain currencies changed in the meantime.
Many microcredit organizations offer this service, too. The advantage of it comparing to the bank loan is you probably won’t need a guarantor. But, if we talk about the interest rate, it is pretty much the same.
For those who have some rich cousin, it is always an option to lend some money from him. This is the most painless version; you will return the exact amount you took.
The worst version is taking the money from a suspicious person. By this, we mean people involved in mafia, drug dealing, and other irregular jobs. Even though it might seem the easiest way, it is very risky. Very often it ends with threats and blackmailing, by raising the interest rate as high as they want. This option is recommended to no one.
As much as you need that money, you have to think about some important things:
- Ask around other people’s experiences with that company or money lender. It is always good to have as much information as possible before entering into the loan. When we talk about moneylenders, KBB Credit can help you to make the right decision. There are many options of loans: personal, payday, bridging, or business loan. Each of these loans corresponds to a different clientele, and different terms and conditions apply to each of them.
- Think is it really necessary to take the loan? If your answer is yes, go to as many places as possible to match the services they offer. Pay attention to every cent. Since you will be repaying the loan for years, every penny is important.
- Check what currency is stable. Unstable currency can change its value very fast, and this will affect your credit as well.
- Now when we already mentioned credit payments, there are two options- fixed or variable interest. Fixed might be safer since you already know that it is not changeable.
- It is also important to pay attention to loan processing fees or early repayment. You never know if you will be able to pay off the credit before you thought.
- Think about the payment of loan repayment insurance. If your job is not secure, it is good to think about this option. In case you lose the job, the insurance will take responsibility for your credit at least for the short period until you get on your feet.
- Calculate what amount you can to allocate on a monthly level, not to put yourself in a situation you cannot cover basic costs.
- Read carefully the contract before signing. Sometimes people just cross over the text without reading, especially small letters. Very often they are not informed about terms and conditions. Take your time and go through the text. The fact you are not familiar with conditions and rights from the contract does not release you the obligation you have.
- Pay attention to everything written in the contract. Sometimes it can be confusing, and if you are not sure, do not hesitate to ask the responsible person. You can also find more information on the internet.
- Personal documents. Before taking the credit, make sure you have your documents with you.
- If a guarantor is needed, whether it is an individual, institution, or any other body that confirms regular loan repayment along with the client, the bank reserves the right to charge him rate if the client is not in possibility.
- Every bank will check if the person is creditworthy before issuing it. This means that the bank will go through your average earning on a monthly level, check if you already have a loan on another place, and so on.
- Define the type of credit you need. There are various credit programs bank offer – credit for unemployed, young couples, housing loan, unintended loan, credit for entrepreneurs, and many others. Depending on the type of loan, conditions are changing as well, interest rate, necessary documentation, guarantor if necessary, etc.
- Loan processing usually takes 30 minutes. It is the time necessary for the banker to check all documents and finish the paperwork.
- The period when we had to wait for months to get loan approval is behind us. Today is possible to get the money even the day after you applied for, but in many banks, the standard procedure will take one working week.
Either option you choose to get the loan, be ready to get rid of some things you were used to, but on the other hand, you will be able to solve some major things you intended to.