There are many benefits that come with applying for a personal loan. It is a fast and fairly easy way to get your hands on badly-needed funds. People who apply for personal loans also expect to pay interest charges with the loan. However, one aspect of personal loans that seems to be overlooked is the added fees associated with taking out this type of loan.
This blog post will offer you some insight into the different fees you might encounter with a personal loan and how they can affect your overall borrowing costs.
Personal Loan Fees That You Need To Know Before You Apply
1 – Application fee
Before you proceed with the application, you will be notified of the amount of the application fee. This fee is payable when you apply for the loan and is not refundable. The application fee helps to offset the costs associated with scanning, photocopying, and processing your application. In the event that the application is not successful, the application fee is usually not returned.
2 – Disbursement fee
In most cases, the lender will charge a fee if they have to send one of their officers to physically hand over the borrowed funds. While one may think of this as a small fraction of the total amount, a higher disbursement fee could mean a lesser interest rate. It is not an insignificant fee and can differ from lender to lender.
3 – Origination Fee
The origination fee is a fee paid upfront that the lender charges you to process the loan. This particular fee is usually charged as a percentage of the total amount borrowed. This fee includes the application fee. However, some lenders may charge this fee as a flat dollar amount.
4 – Credit report charges
With most lenders, you will be required to present proof of good credit history. Some lenders will charge you for the cost of obtaining the credit report. Be sure to check with the lender if you want to know what they charge for this service before applying for the loan.
5 – Late payment fee
If you fail to maintain your repayment schedule, the credit provider can charge you a late payment fee. You should know this charge amount before you apply for the loan.
6 – Prepayment penalty
With some personal loan providers, prepayment of the loan attracts a prepayment penalty fee. This is an additional fee that the lender charges you if you make a payment before the repayment period.
7 – Overdue Fees
Another important aspect of any personal loan application is understanding the implications of not making your payments on time. Most lenders will charge an extra fee for late payments. One should clearly understand the terms defined in the contract before agreeing to sign on the dotted line.
With a personal loan, you can get a lot of benefits, but you need to know that the lender will charge additional fees for the services they provide. Therefore, you should always try to calculate the total interest rate and add the fees of a loan before applying for one.
If you need reasonably priced ,personal loans, Come to Mid-Town Finance Company Nashville. We offer a variety of personal loan sizes to fit your needs. We will work to review our different options, and upon approval, put clients on an affordable payment plan. We do not make payday or title pawn loans, and there are no hidden fees. We are not a payday or title lender, and we offer real installment loans. Whether you are looking to build or rebuild credit, consolidate a few bills, or are simply caught in a bind, we try to make the borrowing process quick and simple. Apply for a loan with us today!