Posted by BC-Loans

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Any Credit You Acquire Necessitates Signing a Contract

  If you are trying to obtain credit, then, regardless of the type, you will need to sign loan agreement or contract. Whether you are applying for a mortgage, credit card or a loan for a vehicle, obtaining financing involves the same criteria.  

What Lenders Like to See – Timely, On-time Payments

  Lenders who are making approvals for credit primarily look at your credit history, your credit report, your revolving credit history and your payment record on installment accounts. Naturally, lenders like to see a history that shows that the consumer responsibly and consistently made his payments on time.  

What the Credit Report Contains

  The credit report, itself, shows past and current debt – all which may include credit cards and mortgage, and vehicle payments. The report is an indicator of a consumer’s capacity to pay and provides details about the length of the loans as well. Therefore, always make sure that your credit report is up-to-date and correct. Obtain the report from one of the two main reporting agencies – TransUnion or Equifax.  

Credit Scores and Ratings

  The credit score represents your credit risk at during a specific time period, with risk graded within a range from from 300 to 900. The higher the score – the lower the risk is for the lender. A rating of “R” is also provided in the scoring. This rating is designated by lenders, based on one’s payment history and can go from 1 to 9. An “R1” rating means you make timely payments while “R9” indicates just the opposite. The credit score then is influenced by:
  • –One’s payments history;
  • –The amount in credit a consumer owes;
  • –A consumer’s credit experience;
  • –The amount of new credit; and
  • –The kinds of credit.

 View Your Credit Report Free via Snail Mail Delivery

  Every consumer in Canada has a right to view the details in their credit file, including the credit rating. Credit reports can be viewed free of charge through the mail or online for a small fee.

Choose Financing for the Shortest Term that You Can Afford

  The best way to establish a good rating is to make timely payments. That will also make it easier to apply for loans at a lower interest rate. When borrowing money then, you will need to consider the loan terms as well. Usually, it’s best to select the shortest loan term that you are able to afford. While you will have to make a higher payment, you can also pay off the amount of the loan just that more quickly. Interest charges cost less over the long run when a loan if for a shorter term.  

Longer-term Short-term Loans Span over a Four or Five-Year Period

  If your terms span over 48 or 60 months, you will pay a lower payment monthly. However, the overall amount will ultimately be much higher than if you choose a shorter term. The annual percentage rate or APR of the loan includes the interest rate as well as additional fees.  

Legal Requirements

  Lenders are all required to provide the APR for a loan, in addition to the terms and conditions, before you sign a loan agreement.  

The Overall Total

  The total loan amount then includes the amount that is borrowed plus the interest and the fees that are paid over the loan’s life.  

A Balloon Loan – Not Just for the Purchase of Real Estate

  Sometimes a personal loan may include a balloon payment. A balloon payment is a big, lump sum remittance, due at the end of a loan term. Loans that feature a balloon payment generally have lower monthly payment amounts and interest rates. However, those extra savings you incur also mean that you should have the balloon amount immediately available at the conclusion of the lending term.