Comparison Shopping is Smarter Than you Think

By: amenda dorothy

Comparing loan plans of different lenders is not an easy task especially when there are hundreds of lenders with a vast range of loan plans to offer. Different loan plans come with different quoted rate, points and closing costs. Points are nothing but the upfront fee payable to the lender at the time of closing and one point is equal to one per cent of the loan amount.

For a same loan plan, you might get different points from different lenders. Hence, before making any loan application, you should be aware of the points associated with the loan plan. Loan related fees are referred to as closing costs. They include transfer charges, government recordings and escrow charges. Some lenders also charge fees for processing. These fees are independent of the lender and vary from one lender to another.

Comparison of loan plans available with different lenders includes various financial activities. You have to thoroughly investigate and compare loan features like maximum LTV, credit and cash reserve requirements and qualifying ratios. Special attention must be paid to check the presence of prepayment penalties and the availability and terms of conversion options.

Lock-in-period of the loan plan must be paid attention before loan application. Lock-in period is the time between which the interest rate and points quoted to you will be guaranteed. Some lenders may offer a lock-in period of short duration only. The usual lock-in-period is 30 to 60 days. The price of loan varies directly with the lock-in-period. If you compare carefully you have bright chances to strike a right loan deal. There are a number of diverse fees paid in connection with loan plans, and different lenders have different names for that. Hence you should confirm that you are not paying any hidden cost.

Those consumers who find it difficult to compare personal loans on their own can take the help of price comparison websites. This method is very convenient as you are not required to search intensively when making comparisons with the help of these websites. You will find many websites that provide absolutely free comparison services for thousands of products and services available in the market. Personal loans are just few of those products that are listed on these websites. The owners of these websites get revenue from the sellers or retailers, and as such, you are exempted from any payment for using the comparison services. The biggest benefit that you get in this method is a lot of information compiled at one platform. It is indeed proving to be a very popular way of smart shopping.

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