7 tips To Avoid falling prey to Hidden Charges on Personal Loans
December 8, 2021

Are you planning to send your children abroad or to a wedding?

There’s a good chance you’ve applied for a personal loan.

If it is so, then you have made the right decision. Personal loans come with the flexibility of repayments, and you don’t have to your pricey possessions for that as well.

Personal loans are lucrative, but they also come with several fees. Are you sure you know about it all? Think again!

Not being mindful of hidden charges while taking loans online in Ireland can make you run into massive expenditures. 

It’s the thing you want to avoid most!

What’s the reason?

Let’s understand with an example: 

As an independent planner, Mr Joseph took out a personal loan so he could gain gear for his workspace. He realized that the credit instalments wouldn’t influence his month-to-month financial plan definitely and figured he could pay more than the base once cash began coming in.

A couple of months, not too far off, he got a huge instalment and took care of the leftover credit sum in full. In the wake of moving the instalment to his advance record, he overlooked it until getting a notification that his personal loan was past due!

What happened here is Mr Joseph paid the instalments but forgot to undertake the pre-payment and pre-closure penalties mentioned in the agreement. As a result, he was yet to pay the loan in full. This negligence on his part even leads to an additional late payment fee!

As a result, it is important to analyze everything before borrowing loans online in Ireland. To understand how to avoid hidden charges, let’s look at the hidden charges you might encounter: 

Top Hidden Charges to Expect with Personal Loans

Always note the * and # with the loan application before submitting it. As they disguise the hidden charges on loan. Therefore, you should be aware of the following hidden charges:

  • Processing fee
  • Cancellation charges
  • Pre-payment penalties
  • Interest rates
  • Cancellation charges
  • Late payment charges
  • Duplicate documentation charges
  • GST
  • Repayment mode swapping charges

Knowing these fees before applying for a loan is important. Now let’s discuss the tips to avoid falling prey to hidden charges:

Analyse The Loan Agreement Twice

An individual agrees to the terms of a loan when he applies for one. The agreement includes all the terms and conditions associated with the loan. Thus, take time and analyze everything before signing the dotted lines.  

Read carefully and ask for any hidden charges or costs that you find unfamiliar in the document. 

Although it may be tiresome for you to go through the complete loan agreement, it is imperative to do so to avoid trouble later.

Enquire about the fee type

The loan agreement includes fresh charges based on your situation and circumstances. Therefore, it is important for you to interact with the lender or seek financial help while applying for loans online in Ireland. Noting the charges and analyzing them with diligence could save you from incurring unnecessary costs at the end of the loan repayment term.

Analyze the pre-payment charges 

Although many lenders do not charge pre-payment fees, it is best to find out about pre-payment charges from the lender in order to avoid the hassle. Borrowers look forward to clearing debt as quickly as possible and, because of this, end up falling into the pre-payment trap. It becomes worse if the bank imposes pre-payment charges. Thus, before opting for pre-payment, analyze the terms and discuss them with your lender.

Is Loan Insurance necessary? 

Like any other insurance health or life, loan insurance is something that a creditor urges borrowers to take to protect their loan repayments. If the borrower cannot pay the complete sum, loan insurance helps cover the missed payments.

There could be multiple reasons for missed loan repayments like a job loss, death, natural calamity, etc. 

Whatever be the reason, if you cannot pay the repayments on the decided date, loan insurance covers it for you.

Well, the borrower shares the flexibility to move out of the loan insurance anytime if he wants to, but as per experts, it is advisable not to do so.

Analyze the late payment fee

Late payment occurs when a borrower cannot pay the complete amount on the due date. It is the fee that a borrower is liable to pay until a creditor is generous enough to let it go. If you want to avoid such hidden charges and do not want your loan amount to increase, you should pay your repayments on time while taking out a loan online in Ireland.

See through Foreclosure charges 

Foreclosure charges are those charges that a lender may charge the borrower before closing the loan. If the loan tenure was about 3 years and the borrower wished to close it within 5 months, the lender can charge a foreclosure fee from the borrower.

But before this, check with your lender whether you have flexible foreclosure terms. Therefore, it is important to identify this charge because omitting it could increase the loan amount.

Ensure transparent proceedings 

Choose to take loans in Ireland from a prestigious firm like online cash finances and don’t worry anymore about the hidden charges on loan. Check whether the creditor offers different options to take a loan or is there any repayment flexibility. The individual and the bank should enter into a transparent loan agreement and list all the terms.

Thus, with a little due diligence, you can avoid the massive trouble like hidden insurance fees, processing fees, or high-interest rates that come with taking money from lenders in Ireland and make debt repayment an easy and breezy affair. Explore and choose the right lender for your personal loan needs with multi-purpose finance options for different needs on a competitive personal loan interest rate.

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