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About the Author: Jessy Taylor is a content writer who loves to share her knowledge among internet users. At the moment she is writing articles about finance tips and Fast loans.

Obtaining a loan is the best solution to fulfill your money shortages. There are many loan types such as short term loans, payday loans and someday loans are available in the market. Selecting a loan type would vary depending on your requirements. However you need to have a clear understanding about the loan type before obtaining. Having a clear idea about the loan type before obtaining will help you to decide borrowing or not. Here are some of the essential instructions which you need to consider before applying or obtaining loans.

Do you really need a loan?

This might be a weird question. Nevertheless, think other ways that you could find money easily. If you have gold jewelleries, then you can pawn or sell them at a high rate and use that money. Do not go for loans unless you do not have any other options to fulfill your money requirements.

Repayment ability

You need to repay the loan amount you have obtained on time. Check whether the loan which you are obtaining could be repaid within the given time frame. Also check whether you have sufficient income to settle your payments. Do not request for a loan amount which is difficult to afford. It will lead you in more debt.

Check the interest rate and the repayment period

Some of the loan lenders would charge high interest rates on the loan amount. Browse online to find the average loan interest rate in the current market. So you can get an idea before getting the loan and if the interest rates are high, then you can easily quit to another loan render. Also many loan lenders would sign contracts on floating interest rates. Which means the interest rates will fluctuate depending on the market values. Sometimes it will be reduced or increased. As you are unsure about the floating interest rates, always try to stick on fixed interest rates. This ensures that you do not have to pay high interest rates if there is any change in the market interest rates. Moreover, do not drag your loan settlement period for a long time. Try to settle them as soon as you can. Try to apply for a loan which could be repaid within 2 or 3 years time frame. Unless, you will have to pay the interest for a long period until you settle down the total loan amount.

Check the additional and hidden fees

Some loan lenders and companies would charge hidden fees on your loan. Inquire if there are any additional fees. Also do not forget to check the penalty fee on late payments.

Read the contract before you sign

Do not place the signature on the contract before clearing your doubts or reading and understanding the whole document. If you are unsure clear the unsure areas then and there and do not wait until the last moment. Also read and understand the conditions well. You will get all the necessary information about your loan in the contract. Last but not least, make sure to keep a photocopy with you, before handing over the contract. It is a kind of evidence which could be used during any future loan disputes.

Do not neglect following these guidelines while obtaining a loan. Follow these instructions to safeguard yourself from loan related issues.  

Further Reading

Below are a few more reasources about loans:

FDIC: Loans & Mortgages - Tips and resoures from the Federal Deposit Insurance Corporation

StudentLoans.gov - Informative website from the US Department of Educatoin about how to manage student loans

Federal Student Aid - Your source for information about the Federal Student Aid

Small Business Lending Fund - Information about the Small Business Lending Fund from the US Department of Treasury

US Small Business Administration: Loan Programs - Information about the loan programs offerby the the SBA

Payday and Cash Advance Loans - Information page from Utah State University about payday and cash advance loans

Payday Loans - Information page by the Washington State Department of Financial Institutions about payday loans

HUD: FHA Resource Center - Everything you need to know about FHA loans from the US Deparment of Housing and Urban Development

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