The most common reason people have difficulties paying off their unsecured signature loans is because they could not make the right decision when it comes to choosing the right unsecured loan deal. They often behave irrationally as they have no other options to settle their financial problems. As a result they apply for a loan which has unreasonable interest rate since they have nothing to put up as collateral.
Here are the tips on how to decide for the right loan product:
1. Low annual percentage rate (APR)
Although non-bank lenders grant loans based on your creditworthiness, you need to survey as many loan products offered by different lenders so that you can compare the actual loan cost of the respective unsecured signature loan products. If you are borrowing the same loan amount, the actual loan cost varies from the APR applied. Thus, the lower the APR applied, the lower the loan cost - which means that you need to choose a loan product which has the lowest possible APR.
2. Affordable monthly repayments
It's better to opt for a loan product which offers affordable monthly repayment plan. Basically, if you choose a longer loan term, you need to endure higher amount of monthly loan repayment. Depends on your current financial status, you need to set your personal budget plan so that you can pay off your unsecured signature loan on time. Never choose a plan which has a monthly repayment plan that you couldn't afford.
3. Opt for trustworthy accredited lender
Many loan seekers, who have bad credit history, are the common "preys" to unscrupulous non-traditional lenders. These irresponsible lenders scammed their clients by ridiculously charging them unreasonable upfront payment, and yet they don't grant them unsecured signature loans as promised.
The most effective way to find accredited non-traditional lenders is by checking out lenders' credibility via Better Business Bureau (BBB) directory. Bear in mind that you need to choose a loan deal from lender who receive at least a "B" BBB rating.
4. No "hanky-panky" loan agreements
Most loan borrowers were not aware of the content of the unsecured signature loan agreement. A loan agreement is prepared to protect the rights between the two parties - "Borrower" and the "Lender". Although the Federal Trade Commission (FTC) is doing its best to monitor the lending practices carried out by loan companies, you need to make sure that the agreement does not bias against you as a the "Borrower". If you have problems understanding the content of the agreement - seek consultation from a lawyer to clarify the content in laymen's term.
Always remember that you should think and act rationally before you make a decision on choosing the right loan deal.
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