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Buying your very first house is a huge move. It involves a huge sum though and not only do you want to make the right pick, you want to make sure you have the necessary funds to finance the purchase. Since it is next to impossible for you to come up with the amount just by saving up money alone, there will be a need for you to sign up for financing.
Before you look for lenders that can possibly grant you a loan, it matters that you will first find out what are the things you need so you’ll get approved.
Lenders work with the idea that if they will lend money to their borrower, they will be paid back, with interests included. This is why before they will grant any loan request, they would want to know first if you have the capacity to pay them back. Not only will they look at how much you are taking home every month, but they will also want to know if you have existing debts or loans and if the amount you’re borrowing is something that you can pay back.
Your Credit Score
Lenders will want to scrutinize your credit score. It is a record of your credit and financial history. It is an effective tool for them to get an idea of how you’ll likely behave the moment you will be granted a loan. Then, they can assess if you are likely to religiously pay a loan back or if you have the tendency to skip payments and default.
Have All the Documents Ready
Make sure that you do check your credit before you send in an application. You want to make sure that your credit history is accurate. Any inaccuracies in your report, you must dispute to get them duly corrected. You’ll also need to gather necessary documents such as your salary information, proof of income, bank statements and other documentation. Find out what other papers you require beforehand so you can gather them all together before kick-starting the loan application process.
When in need of a bigger loan amount, one of the feasible options you have is tapping into your home equity. But even if it’s possible, you should understand what the loan is about and the risks involved before signing up the dotted line. Even if you are planning to pay earlier than the agreed period, you might still pay for expensive prepayment penalties charged by most lenders.
Early Repayment Fee
Also known as prepayment penalties, this is fee is charged by the loan provider when the borrower settles the loan in full or using a lump sum. The reason behind this is that the lender would want to recoup the money that they might have gained when you choose to pay the loan on time. Often, it’s equivalent to 1-2 month interest rate of the loan.
Early repayment fees only make the loan more expensive, therefore, it’s best to find a lender that does not puts a penalty for paying early, and you can do this by shopping and comparing various loan providers first. This means checking on their rates, terms, and policies. Once you found a lending company that will allow you to pay a home equity loan earlier than its due date, the next thing you should do is to plan your strategy.
If the interest rate charged on your loan is fixed, then it’s easier to make a budget since the loan amount you will pay every month until you finish the loan stays the same. Meanwhile, if the interest rate charged on your loan is variable, you may have difficulty in creating your payment plan because the loan amount you need to settle every month is not consistent.
Nonetheless, it pays to add extra money to your repayment as this can reduce your balance and the term of the loan. Just be sure to notify the lender about the extra payments you make. Lastly, be consistent with your payments. Save as much money as you can and use it to settle your home equity debt. This may be challenging at first but it can help you free yourself from the loan sooner.
Frequently Asked Questions
What Is Payday Loan?
If you need cash on the same day, payday loans is the right choice. Payday loans are unsecured loans with convenient and easy payment method. It’s a small cash loan that allows you to get the funds instantly. Repayment options can be tied to your next paycheck or if you wish to pay in advance, that works too.
What is Guarantor Loan?
For those who doesn’t have good credit, applying for a guarantor loan is recommended. Guarantor loans, as the name suggests, requires a guarantor before the loan is approved. The guarantor takes over if in case the borrower fails to meet the repayment terms.
How Fast Can I Have The Money?
Applying for a loan won’t take you hours. As a matter of fact, you can have it done in as fast as 15 minutes. All you need to do is to complete an online form and have it submitted. In just a few minutes, you’ll get the results and the money is automatically deposited to your account.
Do I Need Good Credit?
No. You are eligible to apply regardless of your credit line. Most lenders would prefer borrowers with good credit but it is not a requirement. You can apply for a payday loan and use it to slowly build your credit.
Thinking of getting a loan? Wait no more! Get the funds you need fast. Our services are guaranteed free-of-charge. What are you waiting for? Apply now!