What you need to know before taking a loan

Trying to take out a loan can be an overwhelming experience, especially for the first time. Between all the talk of finance charges, interest rates, payment amounts, loan terms, and conditions it is not hard to get confused. There are several things that you should pay close attention to however, before you accept any loan.

When speaking with a loan officer you should ask about any type of fees that could be charged to your account. Financial institutions sometimes try to slide in “hidden” charges that the borrower is unaware of. Ask if there are any fees to pay the loan off before the terms, if any late fees will be accessed and how much, also if there are any charges to make payments by phone.

Also know your interest rate. If you do not like the interest rate one financial institution is charging, shop around for better rates. Make it known to your loan officer that you are not satisfied with the rate they quoted and that you are going to go somewhere else. If they want your business enough the loan officer will get approval to offer you a better rate.

You need to know if your loan is open ended or closed ended It is important to know if your loan is open ended due to the new Credit Card Act. This Act that went into effect on August 21, 2009 requires that a minimum of 21 days notice must be given before your payment is due. If this requirement is not met, then you cannot have a late fee accessed on your account. It also prevents interest rate increases without proper notice. Having this knowledge can come in handy in the future.

Watching out for these things can ensure you get the best loan.