Borrowing money does not have to feel like you are stuck in a maze. It can be easy and straightforward if you find the right lender. You don’t have to prepare a thick stack of documents just so lenders will give you some attention. You don’t have to wait for weeks or more just to get an approval. Your credit score may not even matter. With easy unsecured loans, you can get money fast without having to put up a collateral. As long as you can verify your identity and show means of paying back, you can be approved in just a few minutes.
Of course, it’s not all rainbows and butterflies. You need to know what you are getting into in order to come out of it with a smile, not a frown. A balanced acceptance of the risks and rewards is essential.
Loan Amounts — How Low Can You Go?
Lenders are taking on substantial risk by giving money to people without doing a credit check. To reduce their risk of loss, they limit the maximum amount that can be borrowed. Most will have a cap at a few thousand dollars. This is not necessarily bad. When you incur a liability, you want it to be as low as possible. In fact, you should take their cue and limit your borrowing as well. Ask yourself how much you really need. You might be surprised as to how low you can go.
Interest Rates — All About the APR
The interest is basically the amount that you pay the lender for their service. This is usually expressed as a percentage of the total amount you borrowed. However, it can get confusing as different companies may use different terms to entice people. An example would be a 1% daily interest rate. It may seem small but if you don’t pay back until a month later, you will owe them a 30% interest rate. Extend this to a year and the effective rate is at 360%. Look for the APR which is the annual rate. It will be easier to compare multiple services that way.
Lending Fees — Where are They Hiding?
Another thing you should watch out for is the fees. There might be hidden charges that will surprise you later on. Read the contract before signing even if it is long and filled with legalese. You might save yourself from a bad financial decision.
Study easy unsecured loans to make the transaction stress-free.