When you need money fast, a loan can seem like the ideal solution. However, not all loans are the same. There are different types of loans with different conditions and implications. When considering whether to get a loan, it is important to understand the implications of that decision. A loan will have an impact on your financial situation and future for quite some time afterward.
Here are 8 factors to consider before taking a loan.
1. Type of loan you want
When getting a loan, it is important to understand what type of loan you are getting. This will affect the amount, payment schedule, and conditions. There are three main types of loans: unsecured loan, secured loan, and a home equity line of credit (HELOC).
Unsecured loan – An unsecured loan has no collateral and is great when you need a small amount of money without having to put up any collateral. It is a good choice when you don’t have any collateral to offer. An unsecured loan is also known as a signature loan or a personal loan. Examples of unsecured loans include student loans, personal loans, and credit card loans.
Secured loan – A secured loan is backed by collateral such as real estate or a vehicle. You use the collateral as security in case you don’t pay off the loan. A HELOC is a type of secured loan because it is backed by equity in your home.
Home equity line of credit – This is a type of secured loan because it is backed by equity in your home. A HELOC is a line of credit where you can borrow money whenever needed and repay it over time with a fixed monthly payment. A HELOC has the added benefit of being able to take out smaller loan amounts while still having access to your full home equity.
2. Check your credit score
Your credit history plays a crucial role in whether you can get a loan. Before you apply for a loan, make sure your credit score is free from blemishes, as many lenders will check your credit history. If you discover an issue with your credit rating, contact the credit company to resolve it. If you want to get a larger loan, you must improve your credit rating.
To do this, you may pay off little debts or raise the spending limit on your credit cards. Even though you have a bad credit history, there are simply bad credit loan choices. If you act intelligently, it will be beneficial. You may get in touch with lenders who offer loans to individuals with bad credit scores.
3. Interest rates and additional fees
When considering getting a loan, it is important to understand the cost of that loan. You should understand the total interest rate of the loan, any additional fees associated with the loan, and the repayment terms. Interest rates vary depending on the type of loan. The interest rate on an unsecured loan will be higher than the interest rate on a secured loan. In addition, there may be additional fees associated with the loan such as a credit report fee or application fee.
When selecting the type of loan to get, it is important to understand the amount of time it will take to repay the loan. Longer repayment terms can help get lower interest rates. However, longer repayment terms may also mean that you will have to pay more money in the long run. It is important to also understand that repaying loans on time is the best way to maintain low-interest rates and avoid default.
4. Best loan terms
When you are deciding which loan to get, it is important to understand the best loan terms for your situation. You want to choose the loan with the best terms for your situation. This can mean choosing the highest possible interest rate or choosing a shorter repayment term. It is important to understand how these factors will affect your monthly payment amount and the total interest you have to pay back.
5. Value of your collateral
Having collateral with your lender as a guarantee is a necessity. Your lender requires you to put up collateral to guarantee that he will recoup the money if you don’t make your payments. The collateral’s value indicates the quantity of money you can borrow. When you apply for a mortgage, for example, you may not borrow more than the value of the home, which is usually the collateral for a mortgage. The same thing applies when you take out a logbook loan. Mwananchi Credit offers you a loan of up to 80% of the value of the car.
6. Implications of taking out a loan
When taking out a loan, it is important to understand the implications of that decision. You may want to consider delaying your loan application to see if there are better conditions in the future. Interest rates on loans are likely to increase as the economy continues to improve. There are also implications of taking out a loan on your credit score. The Credit Reference Bureau in Kenya tracks your credit score. When you take out a loan, it will affect your credit report and therefore your credit score. A higher balance on your credit report means a lower credit score.
7. Your Debt to income ratio
Your debt-to-income ratio (DTI) is the amount of debt you are taking on versus how much you earn. Lenders will check your DTI before approving you for a loan. When considering whether to get a loan, it is important to understand your DTI. Credit unions and online lenders have different requirements for your DTI. Credit unions are often more flexible with their requirements because they are more community-based lenders.
8. Think about another alternative
Before you decide to get a loan, it is important to consider another alternative. You may want to consider getting a personal line of credit from a friend or family member if you need a small amount of money. It is important to understand the implications of borrowing from friends and family members. It is important to understand the type of loan you want, the interest rates, and the repayment terms. It is also important to understand the implications of taking out a loan and other alternatives available to you.
Types of Loans Offered At Mwananchi Credit Limited.
Logbook loans
Logbook loans are loans that use your car as collateral to access the desired credit facility. Most lending companies offer loans from as low as 30% of the value of the car while Mwananchi Credit offers up to 90% of the car value. Cheap car logbook loans in Kenya, enable car owners to get instant cash fast. Like most secured loans, these loans accompany specific interest rates from as low as 1.6% based on the repayment plan and amount borrowed. If you need quick cash using your vehicle as security, a logbook loan is a great option.
Title deed loans
A title Deed loan is a type of loan that involves the use of a valuable asset as security. There are two main reasons why title loans are so popular. For starters, an applicant’s credit score is not taken into account when establishing loan eligibility. Second, because the application standards are less stringent, a title loan can be authorized fast for small sums.
At Mwananchi Credit Limited, the title deed loans require; either a paid employee or a self-employed professional or non-professional should be your choice. The certain loan secured by a home or company can be utilized for both residential and commercial uses. In actuality, it may be used for anything that is not hypothetical or non-prohibitive.
Salary Checkoff Loans
Salary checkoff loans refer to the loans whose repayment is directly taken from clients through their monthly salary. This repayment is done automatically when the time for repayment arrives. In this way, it is simpler to implement and administer. In this case, it is provided to employees whose employers are partnered with the lending company, Mwananchi Credit Ltd.
We strive to provide these loans to as many people as possible in various professions. We work with partnered companies to help reach out to employees who need the extra money the most. We implement strategies that bring positive changes to all our partner’s employees. The repayment does include interest, but we provide low-interest ones. This ensures that you can pay it back with ease while taking care of any pressing expenses.
Weekend Loans
This is a loan offered by Mwananchi Credit Ltd. to customers with an existing loan with our company. A weekend loan is a small, short-term loan that can be approved and provided to borrowers on the same day. This can help them get through the weekends and any expenses involved until they get their paycheck. This is why they are also known as weekend payday loans. These funds can be used for personal needs like weekend plans or urgent expenses during the weekend. Mwananchi Credit Ltd. provides the best weekend loans that you will be able to find to our loyal customers that have an existing loan with us.
School Fees loans
School fees loans are for parents with children in high school or college. However, this isn’t the case for all loans. companies will offer loans that parents can use for their children, or even themselves. These are called “self-study loans.”
These are more like bank loans. You can take these loans to help you pay for things like Textbooks, uniforms, sports fees, transportation, and other expenses. The one thing to note is that some of these companies will charge you a service fee, but with Mwananchi Credit, you will get fast approval and any amount you are looking for, at a low-interest rate.
Same Day Loans
We at Mwananchi Credit, provide a range of loans that allow you to get the funds you need within 24 hours. Additionally, we provide these loans at such excellent terms that you will be able to pay them back easily, ensuring you come out better with them.
Getting a loan FAQs
How do i get Pre-Approved for a loan?
To get pre-approved for a mortgage, you’ll need five things—proof of assets and income, good credit, employment verification, and other types of documentation your lender may require
how do i get a loan?
At Mwananchi Credit, you get a loan without much struggle and pay it with ease. There is no fear of being declined since there are many ways to prove that you deserve the loan. Additionally, you do not have to wait for a long time after applying for the loan to get the money in your account.
Visit the Mwananchi Credit Site and go to the loans options to choose which kind of loan you require. Fill in the calculator module and state the loan amount you need and the time you expect to pay this loan.
Motorcycle loans
If you’re a business person in Kenya, you know that transportation is key to success. And if you need a motorcycle loan to get your business going, Mwananchi Credit is here to help. We offer competitive interest rates and flexible repayment terms, so you can get the money you need and keep your business moving forward. Apply online today and see how easy it is to get the financing you need.
