Did your business survive the pandemic? If it did, you are lucky. If you were doing business the traditional way with a brick and mortar shop, you likely felt the hit of the crisis.
The businesses that survived are those that had already adopted e-commerce. Those that already had their websites and social media pages up and running. But even those businesses have had a hard time at
For many businesses there are bills to pay that they can’t afford because business transactions have been low. In this case you need a third party to help. This can be in the form of a loan, and for first time loan users it can be daunting.Â
Know Your Requirements
This might seem an obvious statement, but it isn’t. You must be thinking by the time I go out to look for a loan, I know my loan requirements. Even if you think you do, you might not.
Do you want a small loan that will help you cover a few expenses for a few weeks or you need a large loan that could take you a while to pay back?
Also, you must ascertain how much you need to borrow. After that, stipulate how long it will take you to pay back. When you answer these questions, search for a lender that will match your requirements.
Don’t just go with the first lender you land on, rather first compare the different financial institutions available, do a thorough research and narrow down to one.
Create a Budget
I cannot stress this one enough. The fact that you are seeking a loan indicates your finances need a boost. Therefore, don’t spend unnecessarily what you have left.
Before you get that loan, look at your monthly income, expenditure (the inevitable monthly bills and basic needs).
When you do the calculations, you should know how much you can save. This will help you calculate how much time it will take you to repay the loan. You might need to postpone spending on luxuries until a later time when you can afford them.
Saving has never been easy but overtime, you’ll be grateful you did. After all, you need to repay the loan and regain your financial freedom which should never be traded for luxuries.
Maximize Your Credit
Your credit score from your financial history gives the lender a sneak-peek into your financial habits. Are you able to pay back in time? Did you file for bankruptcy? Do you have a pending debt? All these will be reflected in your credit history.
The way you build your credit history is by paying back in time, never missing paying dates and repaying your loan fully. First time borrowers might not have a financial history and therefore might find it hard to get a loan.
First time borrowers are likely to get a loan for a small amount that will be easy to repay or are given a higher interest rate. To avoid this, you need to get a credit card and not miss payments. In this process you can build a good credit history.
Interest Rates
Do you know that interest rates range from 200% to 1000%? Therefore, always make it your priority to consider the interest rates a lender is giving you. Of course you want to settle with the lowest rates.
Before you sign any paperwork, first read through, look at the Annual Percentage Rate (APR) and ensure it’s factored in the equation.
You must understand every detail pertaining to interest rates otherwise you might land yourself into further problems. You want the lowest rates possible.
Read and Understand Every Detail
It’s easy to overlook the small print that entails terms and conditions and just rush to Sign. You want to avoid this because you could be signing yourself to unexpected charges and fines.
Already the loan itself is not easy to repay sometimes, how much more if you subject yourself to unnecessary charges and fines? There could be conditions like interest penalties for late payments or negative impact on your credit score. First understand every detail before you sign.
Last Remark
First time loan users might find it a bit hard to find friendly loans. But if you’ve got a solid credit history, you should be ok to get you through a rough time. Just remember to do your research so you can find a creditor that will work with you.
