Getting a loan? A loan is money that is lent to you from banks, credit unions or even your own friends and family. There’s a variety of loans to choose from and all types of different things people take out money for. There’re school loans, business loans, car loans, medical loans, diamond jewelry loan midwest and several others. Sometimes getting a loan can be a good thing, while other times it could be your biggest mistake and completely destroy your credit score. If you really need a loan make you keep these five things in mind before you start taking one out. 

One Loan Can Possibly Ruin Your Life

Well, I’m not saying a loan can ruin your life, but it can ruin your credit score and possibly ruin your chances of owning a home, renting a home, buying a car or even getting loans for educational purposes. Before you take out a loan make sure to talk and be open with the person preparing the loan for you. Ask about hidden fees, interest rates and look at the history of the place your trying to get loans from. See the percentage of people who were able to fully pay their loan back and other ratings and reviews. For a lot of people this may be extreme, but this is your future for crying out loud! You need to be extra cautious! 

These Loan Companies Aren’t Your Friends

Before you take out any loan, remember that these companies are in for the profit and nothing else. A lot of loan companies give out high interest rates on their loans, so they can become richer and greedier. Before you sign the dotted line, remember to look at the interest rates and ask yourself these questions. 

Will I be able to pay this loan back? Could I go to a loan agency with lower interest rates? Is this amount of money I’m trying to get enough or more than enough for me at this current time? 

What Are the Possible Penalties for Failing to Pay on Time or Not Paying at All? 

Not only should you look at the interest rates and history of the loan company, but you should also ask questions about the consequences you face if you fail to pay your loan. There are three possible types of penalty payments you can suffer from when it comes to paying off your loans. 

Failed payment fee- this is a fee that’s charged when you bought something and there wasn’t enough money in your account to cover the product. Late payment fee- Now this will greatly harm your credit score, even if you’re payment is a day late, they will still charge you a hefty fee. If you’re lucky your bank might waive the payment for you, but they won’t do this all the time. Prepayment penalty- I know this one is ludicrous but unfortunately some banks and loan agencies charge you for paying loans off too early.