It can be hard to know who actually has the best loan for you. What should you be looking for when it comes to a loan? Borrow smarter with these tips.
Looking for a loan these days looks a lot different than it used to. Way back in the day, you had to make an appointment, put on a nice outfit, fill out a whole lot of forms, and meet with a lending officer behind a big desk. Don’t remember? Ask your grandparents.
These days, lenders aren’t just at your local financial institution, or even at the megabanks. They’re online, on your television, and in your mailbox, too. Click on a lending site and enter your information and you’ll get a million offers (and often a whole bunch of unsolicited phone calls!)
But with all the competition, it can be hard to know how to decide who actually has the best loan for you. What should you be looking for when it comes to a loan?
“Loans are all the same… right?”
That’s what they want you to think. It may seem straightforward enough — you get some money and you agree to pay it back every month with a little extra. You can afford that house, car, boat, etc., and the lender makes a profit for advancing you the funds. It’s been this way since the dawn of time. So when comparing loan options, the only thing to think about is rate, right?
Well, not so fast. A competitive market breeds innovation, and lots of lenders have been working overtime to make their offerings stand out. This is a new era for loans. And those people that want to borrow smarter actually have opportunities to take more control of their debt.
Technology has made it easier to give you that control and help you understand and manage your loan without having ever having to decode an amortization chart. You can even manage your loan from your phone. So you can see where you stand, how to get out of debt faster, and even make adjustments on the fly if your financial situation changes.
All loans are no longer equal. You just have to know what to look for.
Think long-term when considering what loan to get
Interest rate and application process are both important considerations. Of course you want to pay as little as possible on your loan, fewer fees, etc. And of course you want to get it done quickly — applying is a pain and you just want your money. And advertisers know it — low rates and a simple application process are all they ever talk about.
But while a loan is with you for a lot longer than the application process, that’s where most lenders stopped innovating; once they have your business, why would they?
6 things to consider when shopping for a loan
Here are some things you should think about before choosing your loan if you want to stay in control of your debt. Some will certainly be on your radar. Others…maybe not so much.
1. Cost (obviously!)
We probably don’t need to explain why this one is important — how much you pay is the number one consideration for most borrowers. You may be more concerned about the interest rate itself and how much you’ll pay over the life of the loan. Or maybe you’re just trying to keep a monthly payment within your budget. Either way, you want to save money, you don’t want to pay a lot of fees, and you don’t want any costly surprises.
Some of this depends on the lender, and some on you. Your credit score, credit history, income, and other financial information will determine the rate the lender will offer you. And of course, the terms of the loan will impact the payment.
2. A quick and easy application experience
As we mentioned earlier, this is one of the ways lending has changed the most. This is definitely something to consider, and a major time saver. The idea of pulling out your phone and being done in a few minutes is certainly a compelling notion.
But be careful — sometimes, a smoother experience makes it tempting to sacrifice other benefits because it’s quicker and easier to get the process over with. But there are other things to consider, and they might be worth considering too. After all, if taking the extra time up front saves you a lot of time, money, or frustration over the term of the loan, it might be worth it. So make sure you’re not sacrificing other important features.
3. The ability to manage your loan anytime
This might be a new one for you. For many of us, “managing your loan” has always been limited to sending a check in the mail every month, or setting up an automatic payment so you can set it and forget about it.
But actually tracking progress on your loan? Knowing how much you’re paying on interest, or how much you could save if you paid a little more each month? Seeing how much faster you could pay it off? None of that is easy to figure out without a calculator and an accounting degree!
Some loans now offer the ability to see this. The best ones even have a dashboard to help you know exactly where you are in your payoff schedule. You can easily see how much you could save by paying a little more each month to get out of debt fast. And it’s even as simple as an app on your phone! If you really want to be smarter with your money, this is a great way to do it.
4. A clear way to get out of debt
When you borrow money, you know you’re going into debt. And you agreed to the term, so you know for how long. With most loans, you have the option to pay it off faster if you want to. Which might appeal to you; getting out of debt is smart, and a major focus for many people.
But how much more? How much will it save you over time, and when would your loan be paid off? With most loans, there is no easy way to get that magic number (at least, not without the aforementioned calculator and accounting degree). But what if you could play with different monthly payment amounts and see how they would get you out of debt faster, and how much it would save you…instantly? Believe it or not, that’s a real feature you can have today.
5. Flexibility for life’s curveballs
Paying ahead on your loan to get out of debt sooner can feel like a risk, because if you don’t, that extra money can be sitting in a savings account in case you need it later. Unexpected medical bills, a new refrigerator, car repairs — you never know what life is going to throw at you, and you need to be prepared. This is probably the number one reason why most people don’t get ahead on their debt.
But if you could pay ahead on your loan, knowing that you can access that overpayment amount again later, then it wouldn’t be a risk. That money is available to you at the click of a button, with no fees or penalties. So you don’t have to choose between getting out of debt or sacrificing your financial safety net. Smart, right?
6. Customer service from a real, human expert
In this day and age, it seems like everything is automated. But when it comes to your finances, sometimes you want to talk to a person. A real live person, who knows what they’re talking about, and that you can trust.
Borrowing from a local bank or credit union means not only are you working with an institution you can trust, that’s based in your community and cares about the people in it, but also that has real, live, honest-to-goodness people standing by, ready to answer the phone and talk to you about your situation. That’s not something you can say about a lot of those sites running commercials during the Big Game!
The Kasasa Loan® is the smartest way to borrow
While some of those features might sound like something out of a sci-fi novel, they’re all real and available right now. The Kasasa Loan was created to help people take control of their debt, manage it easily, and pay it off faster without having to sacrifice their financial safety net. There’s no other loan like it on the market.
The Kasasa Loan comes with a lot of amazing features you’ve never seen before:
An awesome dashboard and mobile app that makes it easy to see exactly where you stand on your loan.
A simple interface that allows you to plug in different payment amounts to see how it would affect your payoff time and better plan how to get out of debt faster.
Funds paid over your minimum monthly payment are set aside and accessible at any time with a click of a button. That’s what we call a “Take-Back” TM and only the Kasasa Loan has it!
If you’re in the market for a loan, remember, there are a lot of options out there, but be sure and consider all the pros and cons of each. A loan is a long-term investment, so be sure you’ve thought about how it can best fit your life…even long after the application process is finished.