Almost everybody has borrowed money at some point during their lifetime. It could be a mortgage or even credit cards. Therefore, if you feel like you might need to borrow some money urgently, know that you are not alone. It can be scary, especially for a first time borrower, but more importantly, there are some mistakes that you need to avoid. Here are some of the most common errors that borrowers make in the process of obtaining instant credit.
Not checking through all your options
If you are only going to consider one lender or institution, you might not be making the right choice. There are many reputed agencies and financial institutions that will lend you the money and all of them will have different terms and conditions as well as interest rates. The chances are that if you look hard enough, you will find an option that will suit you and your income well. If you are in an emergency and need a fast loan, it will feel logical to just get it from the first place that agrees, but also tell yourself that you need to pay this back.
Applying even through you do not meet eligibility criteria
In your need for financial backup, you might apply for a fast cash loan even though you know in the back of your mind that it will not be successful. It is one of those things you do because you feel like you have no other choice. However, when you do not have a good enough credit score and you apply, the credit officer will check your credit rating and fail you from obtaining the money. This will greatly impact your credit rating and if you keep this up a few times, you will not be able to get anything passed at all.
Saying yes to the first set of terms and conditions
Negotiating is not such a bad thing. When it comes to getting some instant money, most lenders will allow a little bit of a negotiating space which you need to be aware of. Use this to your advantage and try to ask them for a lower interest rate because that will help you clear off your debt sooner. After all the lenders do not want to lose their money either so chances are they will settle at a sum that is lower.
Getting money you cannot afford to repay
You need to repay your credit on a timely basis. If you have no way to do this, simply avoid getting the credit. If you miss even one installment, you will incur a high rate of interest and this will affect your finances for that month. It will soon change into a never ending cycle which will drain you financially and mentally. Therefore only borrow if you can repay.
Not reading the agreement well
Your attention to the fine print when you are about to sign the bond with your lender, cannot be anything less than meticulous. Failure to do so means that you are signing a binding legal document which carries significant and critical implications for you. Read through well, ask questions, clarify, double check, do the math and finally, if satisfied, sign.