Are You Asking The Right Questions When You Apply For A Loan?

At Hoot we want to make applying for a loan as easy as possible, but we feel it is important that you understand what getting a loan with us means.

If you are accepted for a loan you will be asked to sign a loan agreement. This includes the terms of the loan and what will happen if you don’t make the repayments. It is important that you ALWAYS read the terms and conditions of the agreement before you sign. Here are some of the things you should check when you apply.

Are you borrowing what you need?

Is what you want to spend the money on essential? Could you wait and save for what you want? Better to ask what you need to borrow than how much you can borrow.

Can you afford the repayments?

Your repayments will depend on how much the loan is for, how long you agree to repay it over, the agreed interest. You should make sure that by taking out the loan you are not overstretched and can afford the repayments.

How long will it take to repay?

Your loan repayments will include interest payments (This is called Cost of Credit) and is the amount you pay as your charge for getting the loan. Add this amount to your original loan and this is what you will repay altogether.

Are there any extras?

With a credit union loan there is no setup fee, early repayment or late payment charges. So if you want to make extra payments or want to pay early you can with no charges. In fact, if you pay your loan off early you will save on interest!

Are you comparing like with like?

APR% will help you compare loans but you should remember to compare only loans that you would be eligible to get. For example, if you have a poor credit history, comparing with a bank loan with a low APR% that you would need an excellent credit rating for, wouldn’t give you a true picture of what your options are.

What do we look for?

When we look at a loan application, we always take three things into consideration

Affordability – Credit Worthiness – Individual Circumstances

Every loan is looked at by a person. There are no automatic machine made decisions and your circumstances are always taken into account.

We know that comparing loans can be a bit of a minefield. Take a look at our guide before you begin your borrowing journey.

29 Feb 2024

Author: David Batten, CEO
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