4 questions to ask when applying for a loan

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We all need and use money every day. But it turns out all money isn’t the same; aside from the denomination, it also comes in different forms, shapes, and sizes. Have you ever found yourself trying to park on a city street? All you need is a simple nickel, dime or quarter for the parking meter but you just don’t have one on you. You may have hundreds of dollars in your wallet and credit cards that would allow you to purchase thousands of dollars’ worth of merchandise. But with this parking meter, it doesn’t mean a thing.

Image by epSos.de via Flickr

Then there are the other instances when your money isn’t enough. We have a pocket full of change and that’s about it. Even if you make a nice salary, it can seem like only a few coins in your pocket when it comes to big purchases. When you want, or need, to buy a car or house, the chances of paying for them with cash from your account is slim to none. This is when it’s time to look for a loan.

Depending on your circumstances or the financial emergency you’re in, you could visit one of the cash advance lenders who have locations around town. This is perfect if you need some quick cash but plan to replay it just as quickly on your next payday.

Before you do any transaction, you must look at your financial affairs and be prepared to provide that information to the lender. When you are ready, here are four questions you should ask when applying for a loan.

1) How long will it take to process and approve the loan?

Simply put, when will you have the money in hand or in your account? If you are looking to buy a house, a mortgage loan usually takes 30 days minimum to complete. So don’t start packing your belonging just yet. If you are trying to borrow a smaller amount it can still take up to two weeks to finalize everything. You can window shop for cars but don’t start negotiating until you are have the money ready to go.

2) What documentation to do I need to furnish for the loan?

As nice a person as you are the bank still wants a paper trail. Expect to provide recent paycheck stubs, savings and checking statements, and 401K statements. If you have another loan you are currently repaying, you may be asked to provide details of that transaction as well.

3) What are my monthly payments?

To prepare for your budget, you need to know the exact amount you will need to pay every month and if that number will ever change up or down for the duration of the loan.

4) Is there a prepayment penalty?

Hopefully you can add a few dollars a month extra to your payment and cut down the repayment time by a few months. Find out before you do that if there is a surprise fee coming your way.

These questions will get you started on your way to get your new loan.

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