There is enough literature that cautions you against borrowing indiscriminately. If you have considered all the options available and the consequences on your finances and still decided to take a loan to fund a need, then the next step is to make sure that you take the precautions necessary to ensure that you make an informed decision. Here are some of the important aspects of taking a loan that you should be aware of.
Costs and fees matter
You need to get a complete picture of what the loan will cost you. This is not the interest alone, though it constitutes most of the cost of borrowing. There are fees and expenses involved in getting a loan processed and other conditions of the loan that makes the actual cost to the borrower vary from one lender to the next. The best way to understand the true cost of borrowing is to focus on the annual percentage rate (APR), which includes these factors apart from the interest rate.
