You can’t borrow a loan without signing a contract. And like any contract out there, your loan agreement contains fine print you’re expected to read.
Do you?
Reading the fine print sounds as exciting as watching paint dry, but you’ll want to pull out your magnifying glass anyways. Your fine print contains all the need-to-know details of your loan.
So, before you accept an offer and have your online loan deposited straight into your bank account, read this guide. It proves just how much you stand to gain by digging into the boring black-and-white fine print.
Understand the Lender’s Language
The fine print may seem like it’s written in a secret code, but it’s the financial world’s way of being concise. Accuracy helps everyone involved (financial institutions and borrowers alike) understand the agreement without any confusion.
As you dig into your agreement, you might encounter fancy terms such as APR, origination fees, and prepayment penalties. But don’t worry—these terms (and others like them) are defined online. With a quick and easy detour to Google, you can look up their definitions and demystify this jargon.
Some accessible lenders even have a dictionary function featured on their sites.
Understand Interest and Other Costs of Borrowing
Imagine borrowing money without understanding how much your lender will charge you; that’s what happens if you don’t read about the interest rate.
Interest is something you have to pay on top of what you borrow, and it’s calculated as a percent of your principal. Depending on how high your rate and principal are, the product of these numbers could add a lot to your repayment.
Interest rates can make or break your loan experience as a result, but it’s only one added cost to your principal. The fine print will reveal what to expect in terms of all your costs. By digging into your contract, you’ll uncover if that particular loan aligns with your budget and financial goals.
Learn the Timeline
When you’re in the middle of an emergency, you only care about getting fast cash to solve your financial woes. You can accidentally get tied up with lengthy approval processes if you don’t read the fine print.
While a direct deposit loan implies speedy financial assistance when you need it, you can’t assume it’s a same-day loan. How quickly you receive your approved funds may depend on your lender’s rules and your bank’s deposit policies.
Late Payments Are No Fun
You can easily lose track of what you owe and when if you skip the fine print. That’s where you’ll find all the info about when your lender expects to be paid.
A single missed payment can cause a significant financial headache, as it may result in late fees, added interest, and even credit damage. Nobody wants to pay more than they have to, so read your contract and set reminders for yourself. This can help you send the money out on time.
Read More: How To Prepare for a Business Loan Application?
Your Rights, Your Superpowers
You’ll know what you’re entitled to by reading the fine. What’s more, you’ll know how to navigate any tricky situations. You’re the hero of your financial story — own it.
Remember, reading the fine print is all about speaking the lender’s language, understanding costs, nailing those repayment timelines, dodging late payment penalties, and unleashing your borrower’s superpowers. This knowledge hidden within the fine print will help you become an informed borrower.
