Needless to say, money is a very important factor in everyone’s life. If you don’t have money, you are handicapped. That’s when you need to borrow some from a lender. Let us take a case were you need money urgently, and you don’t have it. Say you need to make an urgent payment of 1 Lac and you don’t have it at the moment. What do you do? Naturally, you will think about other alternatives and ways to get money. In this case, you become the borrower- a person who needs to borrow money (1 lac) for certain period of time. You need to pay back the money with some extra money( interest) to the person from whom you have borrowed the money. But there a couple of mistakes the borrower make time and again which i want to put a light on in this blog. Common borrower mistakes are:
- Lack of information and knowledge in that particular segment: If you do not have a proper knowledge about the place from where you are borrowing, the probably, you shouldn’t borrow from that place. There are a lot of scams going on and you can easily be targeted.
Solution: Research thoroughly about the place you are planning to borrow from and what type of loans you are planning to go for. Research about different schemes available in the market. And have a brief idea of how each scheme works. After selecting a particular scheme, get the knowledge about the lender.
- Not reading the terms and clauses thoroughly: The general human tendency is not to read the entire terms and conditions before signing up for the same because of the size. The size of terms and clauses are really huge and hence we tend to avoid that thinking that it is too boring or the opposite company is reliable The chances of fraud are more in such cases. People can easily fool you by mentioning something crucial and you sign the document without even realizing it.
Solution: The best solution to this is to read the terms and conditions thoroughly before signing up for the borrowing method. If you don’t understand any term or clause then you should connect with the representative and get it cleared. It is always better to ask 10 times rather than regretting over it later on.
- Not negotiation to get the best deal: Generally, if you are a first time borrower, then you might not be aware about negotiation. You might consider the lender is always right and is giving us at the right deal. But that’s not always the case.
Solution: Don’t be shy to bargain because even if you have to 1% less EMI, it’s totally worth in the long run. You might end up saving alot.
- Credit Score: A credit score is a 3 digit number which is very essential for borrowers as it determines the creditworthiness of a borrower. The common mistake related to credit score is that people take this score too lightly. Not everyone is aware with the importance of this score. If your credit score is low, you may not get a loan.
Solution: Therefore it is essential that your credit score has to be good. Even if you don’t have it, FinancePeer will help you to get one by calculating 13,000+ data points. To improve your credit score, you should do the following things.
These are some of the common problems which are being observed among the borrowers. If you are borrowing some money, be careful and be shameless to ask hundreds of question because after all, it’s your hard earned money.