Borrowers often make the same mistakes when cooperating with credit institutions. Some do it out of ignorance, while others do it out of inattention or even on purpose. But all of them have unpleasant consequences – calls from collectors, accrual of fines and penalties.
Below we will tell you how to take out a loan online and avoid mistakes so that the process of cooperation with a financial institution is as comfortable as possible for the borrower.
Mistake 1. Sign a loan agreement without understanding its terms
Today, banks cannot write text in small print and use ambiguous wording – something that could mislead borrowers in a loan agreement. But even despite the changes made, borrowers continue to complain that they “did not understand the terms” or simply did not read them when signing the documents.
The question arises: “Why do borrowers sign a loan agreement if they do not agree with its terms?”
We agree that it is not always comfortable to read every letter of an agreement while sitting in a bank branch or in a hypermarket when applying for a personal loan. Or watch the timer on the site while reading the loan documentation to get an online loan. Especially if you need money urgently …
But it is necessary to read the loan agreement because its signing means an agreement with the terms of obtaining a loan. And it is worth giving this only as much time as is needed to assess financial capabilities.
Many online lenders have made the procedure for issuing a payday loan for clients as transparent and understandable as possible:
- using a loan calculator, you can easily determine the term and amount of the loan that you need;
- the amount of the commission on a loan is calculated even before its registration;
- users are not limited in time when signing a loan agreement – they can do it as soon as they are convinced that each clause of the agreement suits them.
This is what allows the clients of online services to calculate their capabilities and to get a loan on acceptable terms.
Mistake 2. Provide false information when applying for a loan
No, we’re not talking about credit fraud.
Even if you plan to repay the loan on time, you do not always want to share contacts of third parties or provide real data about your work. Therefore, you can indicate inactive phone numbers, or ask former colleagues to “play along” and confirm information about employment.
Borrowers do this so that:
- close people do not know about money problems;
- loan officers do not bother relatives, friends, colleagues, or even the borrower’s managers;
- no letters were received to a valid postal address, in case of delay.
But in reality, by providing false information, you:
- reduce your chances of getting a loan;
- deprive yourself of the opportunity to receive information about the payment of the loan in a timely manner;
- are equated to a fraudulent borrower and may not receive restructuring or other loyal conditions to repay the loan.
Do you want to avoid this? We recommend that you provide only relevant data when applying for a loan.
Mistake 3. Do not repay the loan
Even if your friends tell you that loan delays do not have serious consequences for the borrower – this is not so! Collector calls, bad credit history, fines and interest will become your companions until the loan is paid. Also, the possibility of court hearings and forcible collection of property to repay a loan is not the most promising prospect.
This can be avoided only if you start negotiations with the lender on time. Even if you cannot pay the loan on time, contact the lender and ask about:
- providing credit holidays;
- restructuring;
- debt consolidation.
Mistake 4. Hide from the lender
You hide from the lender when you cannot pay the loan and do not want to receive calls or messages demanding fulfillment of obligations. First, you stop answering phone calls, then change your phone number or ask loved ones to say that they do not know you. Sometimes borrowers change their place of residence … but is it worth it?
If you hide from credit debt, in addition to wasted nerves, time and money, you receive:
- spoiled relationships with friends, relatives and colleagues;
- negative marks in the credit history;
- fines and penalties that increase the loan amount;
- enforced collection of debts under enforcement proceedings.
Do you want such prospects? Then talk to your lender! Together, you will surely find opportunities to pay off the loan.
Mistake 5. Do not check with the credit bureau when the loan is closed
It is not enough just to close a loan and hear confirmation of this fact from the lender by phone. You need to check your credit history at least once a year in order to:
- find errors in a timely manner (for example, the lender did not send information to the credit bureau that you closed the loan, and it is listed as problematic);
- make sure that the fraudsters did not apply for a loan in your name (if this happens, contact the lender and the police);
- make sure that there are no problem debts that you might have forgotten about (if you find them, we recommend contacting the lender and find out how you can repay the loan);
- monitor your credit rating and increase it if necessary.
You’re entitled to a copy of your credit reports free of charge once every 12 months from each of the three nationwide credit bureaus (Equifax, Experian and TransUnion) by visiting www.annualcreditreport.com. You can also create a myEquifax account to get 6 free Equifax credit reports each year.