There are a lot of money lenders easily available in the market if you are looking for borrowing money for any of your personal emergencies. The reason can be anything; everyone needs money in urgency at some point in the lifetime.
Hence now a day, taking a loan is not considered a big deal. The process of taking a loan or borrowing money from any licensed or unlicensed money lender has become a part of our daily life.
Things to know before borrowing loans
There are a few things that one needs to consider before choosing and finalizing the moneylender for borrowing money. If you are looking out for a personal loan and want to borrow money, then there are a lot of aspects that you need to consider before proceeding further with the actual process.
- Ways of loan
Firstly, you need to understand that there are a lot of ways by which you can take a loan or borrow the required money. There are banking or financial institutions in almost all the parts of the world, and additionally, there are these private money lenders also available just around you in the nearby surroundings.
- Reason for loans
You need to understand the reason for you opting for the loan and also the nature of the loan that you are planning to take.
If you have some personal or family emergency and need some amount for a short span of time, then it is always preferable to opt for the personal loan since there is very little paperwork involved in the personal loans.
- Type of loan you are looking for
Then the next thing you need to understand is that whether you want to opt for the personal loan through a bank / financial institution or through an individually licensed money lender.
The loan that is applied through any bank or financial institution is always considered to be the safest way of borrowing money. But there are certain issues involved in opting for a loan through bank / financial institutions.
The banks and financial institutions available around you might give you the safest loan available, but the only fact that is discomforting is the time that is consumed in the entire process. The banks that give your personal loans most probably take a long time as compared to the individual money lenders.
The paperwork process that is carried out in banks is time-consuming and lengthy since they have to go through all the background checks and personal credit history records of the borrower.
However, on the other side if a loan is applied through any individual licensed or unlicensed moneylender, then it does not take such a long time as compared to the banks / financial institutions. Hence most people prefer to go ahead and borrow money from such money lenders.
How to find the ideal licensed moneylender?
There are ways to find the licensed and unlicensed money lenders available around you. If you visit a bank or financial institution with regards to any loan requirement, you will definitely find people around you who are money lenders.
The moment you approach the loan department of any financial institution, these money lenders will notice you, and they will proactively approach you for lending money.
They try to understand the exact amount of your requirement for lending money, and they bring forward to you a loan proposition that covers your requirement with other details such as interest rates, etc., against the loan offered.
There are also ways of finding money lenders online. If you are active on your laptop with an active internet connection, then you just need to search online with the keywords as “personal loan” or “money lenders around me”. That will help you in fetching results with a list of licensed money lenders around your region.
Then the next step that you have to look for is the validity and authenticity of the moneylender from whom you are planning to borrow the money that is required. Always try to find out the registration validity and authenticity of the license that is presented by a money lender.
You can verify these details related to the license and registration on the website of the governing body that takes care of such financial departments of your region. The moment you find the legit and licensed money lender, you are free to proceed further and finalize your choice of the lender from whom you can borrow the money that is required.
The next step in choosing the best-licensed money lender for you is by looking out for the interest rate that is charged by that particular licensed money lender.
Although there is a fixed capping of interest rate decided by the regional and local governing body, it can vary anywhere between 10% to 18% depending upon the amount borrowed and the time span for repayment. You need to find a licensed money lender who can provide and facilitate you with the lowest interest rate available in the market.
This is another way you find the cheapest personal loan available in the market. You will have a list of options with the choice of different money lenders that provide you with various interest rates and different options of repayment. This makes it easier for you to choose between the best and cheapest personal loan or the best-licensed moneylender suitable to your requirement.
While you are in talks of proceeding further with your loan or money borrowing process, you should try to negotiate with the moneylender on terms of repayment options or interest rates.
There are ways to negotiate with your licensed money lender where you can come down to mutual understanding and finalize the loan procedure. This is one benefit you have of choosing the licensed money lenders over any other banking or financial institutions.
The negotiation process will not work if you are planning to apply for a personal loan through a bank or financial institution. However, you can negotiate on terms with the licensed money lenders. There are ways to negotiate, and that totally depends on your communication skills.