Situations of life are unpredictable, especially when it comes to finances. One minute, you have everything figured out. The next minute, you are struggling.
Most people who opt to take loans are financially savvy individuals who need to sort unexpected expenses or use funds for urgent investment purposes. It is contrary to the general notion that borrowers are not financially astute.
To exhibit true financial smartness, it has become important to carry out due diligence on the loan firm before accepting to do business together.
Having a lot of loan firms also comes with its cons – some firms disguised their mediocrity and unprofessionalism.
What are the five(5) things to consider when choosing a loan firm?
It does not matter if it is your first or tenth time accessing loans. The insight below would help you make better decisions.
1. The Company’s Credibility
Perhaps the most important of this list. You have to distinguish between the real players in that space and the wannabes.
It means that you have to confirm the existence of the firm. The reviews from other customers. How long they have been in the business and how successful they have been over that period.
Are they a registered company?
Do they have an office address?
Have they been in the news for the wrong reasons?
The answers to all these questions will help you form a concrete credibility scorecard for the firm. It would inevitably help you make solid decisions.
2. Service Delivery
Great companies who create suitable solutions for clients are always intentional with their service delivery.
Before accepting to do business with that loan firm, one of the things to confirm is how well they treat customers.
- How well do they respond to inquiries?
- How quick is their complaints resolution?
- Can you access their products online?
- Are they active on social media platforms?
- When they have walk-in customers, are they courteous or indifferent in their approach?
All of these give you an insight into how they will treat you when you agree to be their customers. Reviews are one great way to see what other people are saying about the brand.
3. Data Privacy & Confidentiality
During KYC, loan firms ask for relevant questions to enable them to profile you accordingly.
- Are you confident that the information you provided is safe with them?
- Are you guaranteed that the details of your transactions are secured?
- Do you have to be worried about data leakage?
It is significant!
There are cases of loan firms sending nasty messages to friends and families of their customers – labeling them all sorts of names.
I am sure you do not want to fall into this disheartening situation.
4. Interest Rates
One way loan firms compete in the market is with rates.
As a client, shopping for the best rate is excellent. Knowing the cost of the funds you are accessing is a no-brainer in this space.
The interest rate is the extra you pay for the loan. A firm considers several things before a firm puts up an interest rate. Creditworthiness and income are a couple.
The lower the rate, the better it is. And, do not make decisions solely on the interest rates as this could be incomplete research.
5. Repayment Flexibility
Income and expenditures go a long way in determining your financial capacity. Your financial capacity is key in debt servicing.
The real work is not in getting the loan. It is in repaying the loan.
Do not go ahead with that loan without knowing their repayment structure?
Does it align with your financial capacity? If not, are they willing to restructure it to fit your purse?
The answers to these questions are relevant as they will guide you aright so you will not make a rash financial decision. As much as getting the loan is elating, your ability to pay it back without hurting your financial wellbeing is crucial.
Do not be scared of having a conversation with the firm before opting for their service.
At times, a better tenor is all you need to help you fit the repayment very well.
There you have it.
Financial shrewdness is not magic. It is knowing and doing what works for you.
Do proper research before opting for that firm’s loan – your financial wellbeing and peace of mind are crucial.