Jefanie Genilla
The interest rate competition these days is really stiff especially with new industry players like loan comparison sites that help borrowers compare offers from major banks. So it is not surprising that there are a select number of lenders that will offer you low-interest loans just to win you as a client but there’s a catch – hidden charges. So make sure, you read the fine print and learn the most common fees lenders charge aside from processing fees:
- Cost of ownership – This best applies to home and auto loan deals. For both loan types, the borrower may need to pay for the maintenance fees, repair costs, property taxes and insurance. These are all part of keeping the property in top shape.
- Pre-computed interest – This is the lenders way of using the interest rate to their advantage. They’ll pre-compute the interest rate to know how much interest your loan will have accrued at a specific loan term. But what if you pay off the loan earlier? You’ll end up paying more interest. Plus, the pre-payment penalty.
- Prepayment penalty – There are also lenders who will charge borrowers who’ll pay for their loan earlier than the set maturity date.
- Document fee – If you’re shopping for a car, you may also be charged to pay for the doc fees. These expenses for processing the ownership documents, titles and other paperwork.
- Origination fee – This is an inevitable fee for those applying for a personal loan. But here’s the trick to get a good deal: shop around for the most suitable APR, instead of the interest rate. The APR is also inclusive of the interest rate plus the origination fee, assuming that you’ll pay the loan on time, not earlier.
- Refinancing and exit fees – Low cost loans may also be hard to get out of due to excessive exit fees. You might end up paying more if you decide to refinance your loan or upgrade to a better offer.
There are really lenders who’ll take advantage of naive borrowers. After all, it’s just business and they’re just trying to make a profit. But not all providers are the same as there are also those who are committed to offer genuine cost-efficient loans. If you can’t decide or honestly don’t have any idea which loan provider can offer you this, you can always get expert advice from Loansolutions advisers who can tell you the difference between one lender to another since they have a network of more than 20 major banks that offer personal loans. Check out the website and get started with our 3-Step Online Application.
