Introduction
If you need to borrow a lender loan there are many facts, laws, right and duties you should be aware of before you go for it. Getting a lender loan is never impossible. Overdrafts, loans, advanced received, buying on credit are all different names of lender loans offered to you. It is very important before you choose any mode of lender loan that you are capable or you can afford the repayment.
History
You need to know few facts about your potential lender, different financing sources, loan agreement in detail:
- About Lenders
- How long he's been in the business
- Feedback from previous borrowers
- His terms and conditions
- Confidentiality
- Compare his terms and condition with other lenders
- Any extra benefits does he offer than others
- Collateral securities he may ask for
- The process of recovering overdue loans
Different sources and ways of Loans:
- Bank
- Financial institutions
- Loan against bank fixed deposit
- Loan against gold
- Loan against life insurance policies
- Loan may be taken for different purpose, like House building loans, Study loans, Personal loan, bridging loan, business loan, buying on a credit or installments etc.
Features
Terms of the Loan:
- Terms and condition
- Rate of Interest
- Purposes for which loan is granted
- Collateral security needed
- Different interest rates—fixed, floating
- Is Documentation procedure easy?
Secured or Unsecured loan—Secured loans are less risky to the lender as they are secured against some assets or documents. Unsecured loans are more risky to him as they are not secured against any such, the lender relies more on the promise to repay by the borrower, unsecured loans costs more to the borrower.
Before granting a lender loan to you the lender may look at your income and credit history to decide whether you can afford the loan. Before you sign up the loan agreement make sure in advance that you will receive a copy of the agreement. You have right to cancel the loan agreement within first fourteen days of sign up. You can save interest by paying up early in part or full under the terms of “foreclosure”. Check whether this term is included in the lender loan agreement.
Tips and Comments
You must be informed beforehand, well in advance, on all changes on the initial terms and conditions of the lender loan, changes may happen due to the changes in the market rate of interest, government rules and policies, etc, which may affect or cause to affect your benefit. If your loan is on hire purchase agreement you must know that it is not a purchase agreement at all. The ownership in the goods will pass to you or you will become the owner of the goods you have bought on hire purchase after paying the last installment as per the contract and all dues are cleared of, until that whatever you are paying, you are paying as hire charges for using the goods. The seller can, on your default take back the good unlike installment purchase.
Your financier of lender loan deserves the following rights if you fail to repay your as per the terms agreed:
Cancel the loan agreement
Ask to repay the full outstanding amount
Take legal action against you.
However, before taking these steps, he has to send you a copy of the statement of account on outstanding balance, a legal notice with probable consequences.
