A loan requires a guarantor and is collateralized by an item of property which is known as lien. This term lien generally encompasses all types of mortgage forms, and in case the borrower is not able to repay the loan, the lien that is used as collateral then becomes the property of the lien holder. Sometimes loans often lead the borrowers to go into an economic crisis and often end up being in a debt trap, that is to repay a loan, the borrower tend to take another loan, and thus the cycle never ends.
It is important to keep track of your expenses so that you can know if you are able to repay the loan until your next installment date.
Safety Precautions
Though a convenient way to get loans, following safety precautions before applying for it can save you from entrapping yourself in a debt trap or a fraud trap:
- Before applying for any loan, you need to verify whether the money lender is trustworthy or not. Check about the money lending history of that organization and ask its customers about its reviews so that you can get a full picture about that company.
- Always choose those money lenders who are licensed, that is having a license can pretty much make sure that the company is not of dubious or shady character and that it would not do anything that can get its license cancelled.
- You also need to remember that some money lenders charge late fees if the EMI is not paid on time leading to more debt.
- Ask about any hidden charges before so that while repaying the loan you can have the required amount of money with you.
- Go through the terms and conditions carefully before applying so that any doubts and queries can be solved beforehand to avoid complications and frauds later. All the instructions should be read clearly so that you do not get cheated and dragged into legal procedures.
- While choosing the plan, you need to be vigilant so that only that plan gets chosen which will serve you the best. Do all the calculations before finalizing it to prevent the late repayment of the loan which can lead to penalties as well.
- Keep checking your bank account and transaction details time to time in case you have opted for Continuous Payment Authority system so that you can know if right amount of money is being withdrawn or not.
By visiting our website you can also calculate your mortgage and amortization expense so that your money does not get wasted. It is advisable that you continue to pay the installments on time.
