Are You Looking for a Loan? What Are Your Options?

There are many options when it comes to taking loans. Whether your need for a loan is small or big, you should consider the right loan provider for your needs.

Taking out a loan is no small thing. Whether you’re paying for something huge like a new house, or you’re taking out a personal loan for a slightly smaller expense, it’s important to choose a lender who can support you with the right guidance, and terms throughout the life of your loan.

People take out loans depending on their needs.  For example;

If you need a small, immediate financial need like a medical bill, supplies for your business, school fees, or utilities? (2,000 to 40,000 shillings) then you might consider mobile lenders.

Mobile loans typically range from 200 to 40,000 shillings and are the fastest loan option. The application takes a few minutes with just a smartphone.

For a medium-sized business investment like a plot of land, greenhouses, small pick-ups (80,000 to 999,000 shillings), Chamas would be your typical choice. They are a type of micro-savings cooperative where all members of the Chama save money through one Chama and then have the option to take out loans with that savings pool at favorable interest rates.

If you’re making a big purchase like a storefront, car, house, or lorry (1 million+ shilling) then visiting the bank is the best option.

Banks offer the largest loan amounts, but the applications for them are usually the longest and take the most amount of time. It’s important to give yourself plenty of time to plan for a bank loan.

ALSO READ: 6 Amazing Things You Can Do With Your Bonga Points

Before making your mind up your mind on the lender you want to use, consider the following factors to avoid regrets in the future.

1. Credibility

This is one of the most important elements you’ll need to look at when finding a lender for your loan.

Try to find out as much information as possible about the lender from testimonies of previous customers and go through positive and negative reviews to know whether that particular lender deals with its customers in a transparent, honest way.

2. Loan Specialty

Every lending organization is designed for a specific group of customers. For instance, some offer personal loans while others target small businesses.

So, for what purpose do you need the money? Is it commercial-related or are you planning to buy groceries?

A firm designed to offer loans to individuals works quite differently from those providing financial support for businesses.

3. Interest Rates

Every money lending organization has a specific interest rate and a preferred system of repayment.

You can find the exact values on the company’s website or in their advertisements. Alternatively, calling an agent may be your ideal option, especially if you’ve other related questions.

Whether you need the money to grow your business or meet private needs, you’d want a lender with the lowest interest rates possible.

4. Terms of Engagement

Before signing the deal, make sure you read through all the information as they might have some important details.

What happens if you pay for the loan a few days after the due date? Are there penalties, and how flexible are these rules? Once you have answers to these questions and more, make sure you can meet the requirements.

Your credit score is always at stake when it comes to loans and other financial decisions. Therefore, try to avoid lenders that might get you in trouble.