At some point in time, every adult will eventually make big life purchases like properties, cars, weddings, building a home and more. Unless you are filthy rich, many people opt to take up loans. With a loan, one can use it for just any purchase and lenders just need to be sure you are able to pay it back.
There are many different types of loans for different purposes such as mortgages for a property, auto loans for vehicles and student loans for your education. With so many banks and so many offers, how do you know which one is the right one for you?
Let’s take a look at some things to consider when evaluating a loan offer.
- How much does your total loan cost?
- How easy and convenient is the application process?
- How often do you need to repay?
- How dependable is your lender?
How much does your total loan cost?
When applying for loans, you first need to identify the loan amount you want and whether you’ve been approved. Sometimes there will be gaps in the amount you’ve applied for but instead, you get an offer for a lesser amount. When this happens, you can always accept it or try another lender to see if you qualify for that amount.
But, total loan cost represents the amount of loan and additional costs like annual fees, repayment charges, handling and administrative fees and late payment fees. This is your total loan cost. In addition to that, you need to take note of the terms for penalty fees and beware of any exit fees.
Annual Percentage Rate (APR) is the annualized cost of the loan which includes all the fee charges. By knowing your loan’s APR, you’ll be able to calculate the total amount of your principal, interest and fees. It is important to calculate your APR to determine whether the total payback amount fits your budget.
How easy and convenient is the application process?
Applying for loans is a long and gruesome process. There’s a lot of paperwork and documents to provide and may even eat into your workday as you may need to visit the bank. This process typically takes weeks and mind you, it’s only for one bank.
You should always factor in the time for the application process if you require the funds by a certain date. Also, during the pandemic, it’s difficult to move around with all the lockdown measures in place.
Suerly makes this process a whole lot easier by enabling the process all at your fingertips within the app itself. There is no longer a need to physically visit a bank and you can upload all your documents on the app itself. This not only saves time and cuts short the application process, but you’re also able to do it within your own time accordingly.
How often do you need to repay?
With loans, you also have to consider the monthly payments. Be sure to check with your lender on your payment amount and how often you need to pay. You will need to consider this based on your typical monthly budget and how much cash you’d need to cover your monthly expenses.
The longer your loan is, it also means the longer you need to commit. That requires planning to ensure you’re able to sustain making payments long term. Oftentimes, there are penalties for paying late, so do be mindful of that and avoid paying more than you need to.
How dependable is your lender?
In Malaysia, almost all trusted banks offer loans to customers. Every bank offers different products and services so you need to do your due diligence and compare all available loans across the market before deciding on one. You need to also check your credit score beforehand to determine how much you’re qualified to borrow. Most banks require good credit scores and before they offer you a loan.
Not only that, you need to be aware of protecting your data. Most banks and comparison websites are notorious for exchanging data with telemarketers. Don’t be surprised when you suddenly get hundreds of calls daily offering you their products and services. You can read more about the downfalls of comparison websites in our previous blog here.
Because of this, Suerly aims to fill the gap of protecting user rights and enabling autonomy and privacy over your information. Suerly connects you directly and most importantly, safely to the banks. This can only happen if and when you provide consent.
Applying for loans can be a huge pain in the butt but it is necessary as we need to make certain purchases in life. Why should the process be such a difficult one when millions of people go through it? With technology, why are we still stuck with all the filing, documenting?
It’s time to think outside the box with Suerly, where we pave the future for loan processes. Just like how we implement technology into our homes, appliances, gadgets, we want to ensure a safe and easy experience for everyone. It no longer has to be that complicated and arduous. Understand more about Suerly from our Founder here.