I typed “borrowing money” into Google and up came with 44,600,000 results. The internet is such a great place for information gathering that it sometimes gives would-be borrowers myths instead of facts. These myths need to be dispelled because some believe it as 100% true.
1) Interest rate is the most important consideration:
Naturally paying less is what we all like to strive for but at the end of the day the saying “Interest rate means nothing if you do not meet the lenders policy” applies when borrowing money. Lenders all have different policies and rules that need to be followed when assessing a clients suitability for a loan. A lender may have a low rate but does the applicants unique, personal situation meet the lenders policy in order to be approved for a loan with that rate?
2) Loyalty to a lender certainly helps when borrowing money:
Loyalty used to come into the picture many years ago as a positive point when borrowing money. However, due to the changing nature of lending, new regulations and also our own personal situations, this cannot always be relied upon. You may have banked with a certain lender for years and been a great customer. But if the rest of your current situation doesn’t fit the lender, you may not be able to borrow money.
3) Alternative lenders have higher interest rates:
This is a concern I hear a lot. Just like shopping for groceries where going to a different outlet may involve varied prices, different lenders have different rates BUT they are not always higher. The only way to compare is to do your research when you are considering applying for a loan. Every lender has different products and promotions at various times meaning that what you see today may change tomorrow.
As you can see what we think we have come to know may not always be so. Do your research before you jump in. Ask as many questions as needed and if you have concerns or the responses raise more questions, get a second opinion.