3 Things to Know Before You Apply for a Loan

Applying for a loan is usually an inevitable thing for most; however, there are three primary things that you should know before you apply for a loan.

Credit Score

Your credit score is one of the most important numbers in your life. It helps lenders determine if you can borrow, how much you can borrow, and your interest rate. Before applying for a loan, you should always check your credit score first. Checking your score does not affect your score, and many banks offer access to your credit report and score for free or at a very low cost.

Determine How Much You Can Borrow

How much you can afford to borrow verses how much you need to borrow may be different. Estimate the monthly payments against your current and projected expenses over the length of the loan. Take into account possible changes to income.

Loan Costs

Your credit score is the best indicator of what your interest rate may be. Use online calculators to determine the total costs of the loan over time, and any fees associated with the loan. The loan costs also help you determine how much you can afford to borrow.

Once you have determined your credit score, how much you can afford, and the possible costs of a loan, be sure to select a lender whose terms meet your needs.

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