Before taking out a loan it is a good idea to ask yourself a number of questions. The answers to these questions ensure that you not only keep the risk of unpleasant surprises as limited as possible, but you also ensure that you take out with certainty that one loan that will be able to meet all your expectations without any problems. For this reason we would like to present a handy loan checklist.
How much can I borrow?
The first thing you need to decide for yourself is exactly how much money you want to borrow and whether you can borrow that amount. Banks and other financial institutions nowadays attach strict conditions to taking out a loan so that this is not possible for everyone. By having a good picture of your financial situation yourself, you ensure that you go to the bank with a constructive file. This way you also keep the chance of getting a loan approved as high as possible. Please note, when compiling this file it is of course necessary to take your income into account, but current loan repayments are also taken into consideration.
What credit conditions do I want?
As a potential borrower, it doesn’t hurt to dwell for a moment on the credit terms that you wish to use. Nowadays there are various forms of credit on the market that all have their own possibilities and limitations. For example, it is possible to take out an interest-only loan, but you can also start paying off immediately after receiving the credit amount. In addition, various forms of credit offer you the option of re-using an amount already paid off, whereas this is not possible with a traditional installment loan. On the other hand, a revolving credit with flexible conditions is a lot more expensive than a linear loan where it is not possible to re-draw.
Duration of the loan
The last important point to take into account is the duration of the credit in question. In most cases, as a borrower, you have the option, within certain limits, to determine yourself the period within which you wish to repay a loan. Try not to make the duration too long to keep the costs under control, but always ensure that there is sufficient breathing space. Even when things are going a bit less financially, your payments must continue to take place.