Stim Money
  • Finance
  • Insurance
  • Housing
  • Stimulus Money
No Result
View All Result
Stim Money
  • Finance
  • Insurance
  • Housing
  • Stimulus Money
No Result
View All Result
Stim Money
No Result
View All Result
Home Finance Loans

Loans: What to Know Before Applying

in Loans
Loans: What to Know Before Applying

Loans are a very helpful way of borrowing money that you need quickly, but not everyone can simply apply and attain any loan they choose. If you are in a position that you have decided you need a loan, whether it is to pay off a debt, help in purchasing a car or even a house, then there are a few things you should know before applying.

Credit score and credit history

The first thing that lenders will take a look at is your credit score and credit history. This will show lenders that you are able to pay your debts and do so on time. The higher your credit, the better chance you have at securing a loan with the lowest interest rate possible. Although 1-2 percent may not seem like a huge difference in interest rates this could actually mean a difference of thousands of dollars.

Every time you apply for a loan it is a credit inquiry which, if done too many times and too often,  can lower your credit score. This means that before applying for a loan you need to know your credit score. Use a free site to check your score. Be sure to wait on applying for a loan and take some time to improve your score if it is less than favorable.

Income level

This is another aspect that will be examined when you are applying for a loan as this determines what monthly payment you are able to afford. You will need to show proof of your income included in your application which might include pay stubs, W-2 forms, a salary letter from your employer, or tax returns from the past two years as well as invoices and receipts if you are self-employed. Your income is also something you will want to know for yourself so you do not enter into a loan that you cannot afford.

Monthly expenses

Similar to knowing and understanding what you can afford based upon your income, you should also calculate your monthly expenses and payment obligations. For example, consider your monthly income is $5,000 per month, but spend $2,500 for rent, $1000 on groceries, $800 on child support and $500 to other bills. This would leave you with only $200 to pay for any type of loan and may not realistically allow you to afford a loan that you are looking for.

Net worth

When applying for a loan your prospective lender might not only look at your income but also your assets and liabilities which determine your net worth. Your assets are the things that you personally own, while your liabilities are financial obligations such as a pre-existing loan. Especially since the loan that you are applying for will become a new liability, it is important for you to understand your net worth, and keep your finances managed.

Shop around

Although you might think you are receiving a great offer off the bat, you should always listen to multiple offers before deciding on a loan. Shop around and make sure you are getting the best interest rate possible. Remember, this loan is going to be in your life for at least a few years and can affect the rest of your life if not managed properly.

Previous Post

Using a Line of Credit vs. a Personal Loan: Which is Right for You?

Next Post

Paying Your Insurance Premiums

Related Posts

Using a Line of Credit vs. a Personal Loan: Which is Right for You?
Loans

Using a Line of Credit vs. a Personal Loan: Which is Right for You?

April 6, 2020
Next Post
Paying Your Insurance Premiums

Paying Your Insurance Premiums

No Result
View All Result

Recent Posts

  • Unemployment, Stimulus Money, and What to Do with It
  • Do Small Business Owners Get COVID-19 Stimulus Checks?
  • Some Reasons Why You Might Not Receive a COVID-19 Stimulus Payment
  • Common Questions About the Stimulus Check Payments
  • Finding the Best Mortgage

StimMoney-Logo

Stay Informed With Our Newsletter!

Stay informed on the best way to improve your financial stability. Additionally, get updates on the latest news and everyday tips on what you should know about finance, insurance, and your home. Submit your email below to get subscribed!

By submitting, I authorize: (1) Stim Money to use and share my information in accordance with its Terms of Service and Privacy Policy, and (2) Stim Money or third-party companies, including Stim Money’s business partners, to contact me by email with offers for goods and services at the email address provided. Please note that the information you have provided to us may be supplemented with additional information obtained from other sources.

SMG-logo-transparent-50px

Get Our eBook & Newsletter!

Stay informed on the best way to improve your financial stability. Additionally, get updates on the latest news and everyday tips on what you should know about finance, insurance, and your home. Submit your email below to get subscribed!

By submitting, I authorize: (1) Stim Money to use and share my information in accordance with its Terms of Service and Privacy Policy, and (2) Stim Money or third-party companies, including Stim Money’s business partners, to contact me by email with offers for goods and services at the email address provided. Please note that the information you have provided to us may be supplemented with additional information obtained from other sources.

Stim Money does not provide tax, investment, legal, or financial services. The information provided in this site is solely for informational purposes on an "as is" basis at user's sole risk. Stim Money makes no guarantees as to the accurateness, quality, or completeness of the information. Stim Money shall not be responsible or liable for any errors, omissions, or inaccuracies in the information. Nothing on Stim Money should be regarded as legal, financial, or tax advice. User is solely responsible for verifying the information including, without limitation, seeking the advice of a qualified attorney or financial services professional. Stim Money is not endorsed by or affiliated with the United States government or any financial regulatory authority, agency, or association.

© 2020 Stim Money | All Rights Reserved

  • Contact Us
  • Privacy Policy
  • Terms of Service
  • Unsubscribe
  • Do Not Sell My Info
  • Contact Us
  • Privacy Policy
  • Terms of Service
  • Unsubscribe
  • Do Not Sell My Info

© 2020 Stim Money | All Rights Reserved

No Result
View All Result
  • Home
  • Finance
  • Insurance
  • Housing
  • Stimulus Money