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9 Important Things You Should Know Before Taking A Bank Loan - Business - Nairaland

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9 Important Things You Should Know Before Taking A Bank Loan by Samguine: 10:15am On Sep 13, 2016
There are different types of personal loans a depositor can take from his bank. While some loans may not be tied to specific purposes, others may be for certain projects such as business, mortgage and car purchase.

The lender will also ask specific questions from the borrower to be sure it will not turn to a bad debt. Borrowers should understand the conditions of taking a bank loan in order to avoid running into problems.

The following are major things a borrower should understand about bank loans before applying for one.

1. Understand your preferences: Before heading to your bank, check out loan packages and see what competitors are offering. You need to be aware of what kind of loan you are looking for, the terms you can reasonably afford, and your goal for paying off the loan as fast as possible. If you are looking for a specific type of loan (auto, mortgage, personal) make sure you find the best deal for you.

2. Ask questions: When you find the loan package you are most interested in, contact the bank directly to find out upfront what the requirements are for loan eligibility. You may need to make an appointment in person to discuss the necessary materials, documents, and timelines you will need to get started on the approval process. Banks have different requirements and it will be important to know what they are upfront so you can be prepared.

3. Application: You need to apply to your bank to get a loan, stating the purpose, with enough evidence that you will repay the money.

4. Interest: Personal loan is a lump sum, which a bank gives a customer to be repaid in instalments with interest over a period of time. The loan can be for a year or over 10 years. Banks charge interest rates per annum.

5. Terms of agreement: It is very important to read all the terms of your loan before taking it. There may be some clauses, which you may not be expecting such as the possibility of the bank increasing the interest rate after taking the loan, among other things. The terms and conditions will show you the actions that the bank can take against you if you are unable to repay the loan on time.

6. Collateral or security: Banks usually ask for collateral before granting loans which could be landed property or other specific assets. When the bank is not asking for collateral, it will definitely ask for another form of security that could be a guarantor or the loan may be tied to your salary. You may lose your asset if you fail to repay the loan.

7. Hidden charges: The interest rate may not be the only thing you will be required to pay along with your loan. Banks may have some other charges such as a fee for processing your loan and charges whenever you default in your monthly repayment of the loan. So, it is important to know all the hidden charges. You can ask your account officer to explain these extra charges.

8. Loan restructuring: You can approach your bank to negotiate the possibility of restructuring your loan if you are not comfortable with the terms. You don’t necessarily have to wait until you have problems with the repayment; you can still negotiate when you are already paying your debt.

9. Credit card: Applying for loan may not be the only option available to you. If you need a short loan, getting a credit card may also be useful. You, however, need to understand how to apply for a credit card and have a good credit score. Depending on the bank, some may give you an interest-free credit for your first usage.

Source: https://www.nigerianbulletin.com/threads/9-important-things-you-should-know-before-taking-a-bank-loan.221900/

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Re: 9 Important Things You Should Know Before Taking A Bank Loan by buygala(m): 10:15am On Sep 13, 2016
This thread isn't for me sad


Any spirit of heart attack from Shylock Nigerian banks.... I jump and pass sad

24 Likes 1 Share

Re: 9 Important Things You Should Know Before Taking A Bank Loan by ayobase: 10:47am On Sep 13, 2016
If bank loan is on OUTRAGEOUS interest now, then fixed deposit should also be on OUTRAGEOUS interest.

This is the right time to fix deposit if condition stated above is OUTRAGEOUSLY right.


"Terms and conditions apply", a clause that discourages me from any transaction despite reading 6-7 pages of rules.

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Re: 9 Important Things You Should Know Before Taking A Bank Loan by Turks: 6:50am On Sep 14, 2016
There should be a 10th item in that list..


*A heart failure should the reason for taking the loan goes south..

1 Like

Re: 9 Important Things You Should Know Before Taking A Bank Loan by nony43(m): 6:50am On Sep 14, 2016
Noted, but one thing I know is it is not always a good to start a business with a loan

9 Likes

Re: 9 Important Things You Should Know Before Taking A Bank Loan by yungmaestro(m): 6:52am On Sep 14, 2016
Young was #here
Re: 9 Important Things You Should Know Before Taking A Bank Loan by lavenjcrown(m): 6:52am On Sep 14, 2016
Kk.
Re: 9 Important Things You Should Know Before Taking A Bank Loan by youngwarlocks: 6:55am On Sep 14, 2016
Obviously this thread is not for me. Am outie

"IF HE TAKES YOU OUT FOR A ROMANTIC DATE ON TUESDAY AND WEDNESDAY NIGHTS... EVEN THURSDAY, THIS SEASON INSTEAD OF WATCHING UEFA CHAMPIONS LEAGUE, THEN IT'S NOT LOVE.... HE IS A CHELSEA FAN

5 Likes

Re: 9 Important Things You Should Know Before Taking A Bank Loan by niggi4life(m): 6:59am On Sep 14, 2016
The most important thing to take note of is your Heart condition..

Take a bank loan and your business crumbles... you might get a heart attack

4 Likes

Re: 9 Important Things You Should Know Before Taking A Bank Loan by mmmustapha(m): 7:01am On Sep 14, 2016
isn't a good idea to start business with bank loan, start with what you have in hand.

4 Likes 1 Share

Re: 9 Important Things You Should Know Before Taking A Bank Loan by justi4jesu(f): 7:01am On Sep 14, 2016
nony43:
Noted, but one thing I know is it is not always a good to start a business with a loan


Why is that?

1 Like

Re: 9 Important Things You Should Know Before Taking A Bank Loan by don4real18(m): 7:03am On Sep 14, 2016
book

1 Like 2 Shares

Re: 9 Important Things You Should Know Before Taking A Bank Loan by mccoy47(m): 7:03am On Sep 14, 2016
Mtchewww. Fraudulent Nigerian banks!

2 Likes

Re: 9 Important Things You Should Know Before Taking A Bank Loan by Emeka71(m): 7:05am On Sep 14, 2016
Also; understand the fact that at payback time; bank is calculated to make money from you; BTW we are fools in Nigeria bringing recession upon ourselves; we keep money in the bank and Dangote and other few businessmen use our money to do business and make money for themselves and the banks; let's think business; lets think production.

1 Like

Re: 9 Important Things You Should Know Before Taking A Bank Loan by Nobody: 7:06am On Sep 14, 2016
please, how do I collect loan from fidelity bank?
Re: 9 Important Things You Should Know Before Taking A Bank Loan by eph12(m): 7:08am On Sep 14, 2016
Thinking of getting a long term loan to hasten the expansion of my business. Any suggestions on the best bank for this?
Re: 9 Important Things You Should Know Before Taking A Bank Loan by aninexzy(m): 7:10am On Sep 14, 2016
Nice post! But I hate anythiing dat has to do with loan

3 Likes

Re: 9 Important Things You Should Know Before Taking A Bank Loan by ercel: 7:10am On Sep 14, 2016
The best application of the word 'loan' is when a footballer goes on 'loan' to another club,the bank type of loan is only sweet for people that owe banks billions,people like Dangote!

3 Likes

Re: 9 Important Things You Should Know Before Taking A Bank Loan by HAH: 7:10am On Sep 14, 2016
This terms are surely not for blue chip coys as blue chips companies determine their conditions themselves if it ok with the bank fine, if not the next bank is waiting to give then on that conditions.

Blue companies are the one with credibility and reasonable operates profitably whether in good or bad market, example of blue chip in Nigeria are Nigeria Brewery, Dangote, Chevron, nestle etc

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Re: 9 Important Things You Should Know Before Taking A Bank Loan by englishmart(m): 7:10am On Sep 14, 2016
MMM. Sorry I meant MMS
Re: 9 Important Things You Should Know Before Taking A Bank Loan by mostyg(m): 7:11am On Sep 14, 2016
Mention me when banks start giving non interest loan.

2 Likes

Re: 9 Important Things You Should Know Before Taking A Bank Loan by Nobody: 7:11am On Sep 14, 2016
It should be particularly noted that commercial bank loans should be avoided as much as possible by those seeking it for non-business purposes or those just starting a business. It's too risky to gamble into that in a volatile economy like ours.
I would rather advice micro finance loans for start up business or cooperative /work place loans for other personal purposes.
NEVER TAKE BANK LOAN TO BUILD HOUSE, BUY CAR OR FOR RECURRENT EXPENDITURES

4 Likes 1 Share

Re: 9 Important Things You Should Know Before Taking A Bank Loan by eph12(m): 7:12am On Sep 14, 2016
justi4jesu:



Why is that?
To use a bank loan to start a business? Not advisable at all. The incubation period for a start up is 3-5 years so how do you service your loan when you still finding your feet? If it's to expand the business fine but not starting a new one unless there's a business you're running aside which can help in servicing the loan.

1 Like

Re: 9 Important Things You Should Know Before Taking A Bank Loan by acunon: 7:12am On Sep 14, 2016
Nice write up @op
Re: 9 Important Things You Should Know Before Taking A Bank Loan by Pavore9: 7:14am On Sep 14, 2016
nony43:
Noted, but one thing I know is it is not always a good to start a business with a loan

Doing that is a high risk gamble and not advisable.

2 Likes

Re: 9 Important Things You Should Know Before Taking A Bank Loan by ademega(m): 7:16am On Sep 14, 2016
Workers that took bank loan now are regretting . Some that were supposed to have finished the payment by January have been extended to December this year because of the delay in salary. More also, the interest has increased more than 4 times in the Pace of 3 years. In fact some had to take cooperative loan to pay off their bank loan. Bank loan its killing and its a killer. The best best way to early grave.
In fact someone told me that in her place of work two people that collected bank loan died and the bank said they would spread the people loan across the living loan debtors.
I prefer savings for a long period of time to bank loan or at best cooperative.

4 Likes 1 Share

Re: 9 Important Things You Should Know Before Taking A Bank Loan by ehubaba(m): 7:16am On Sep 14, 2016
nice write i applied for diamond bank loan 2 million to get a car the loan was to pay back in 48moths after calulation of my repayment total wud be 5m ..not encoraging

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Re: 9 Important Things You Should Know Before Taking A Bank Loan by Lexusgs430: 7:17am On Sep 14, 2016
Don't start complaining about how long you have left to service the loan and how unfair the interest rates are...................

The banks are not a charity organization. They were put on earth to make & keep money........................
Re: 9 Important Things You Should Know Before Taking A Bank Loan by Emeskhalifa(m): 7:17am On Sep 14, 2016
angry
Re: 9 Important Things You Should Know Before Taking A Bank Loan by chronique(m): 7:18am On Sep 14, 2016
Are micro finance banks permitted to collect collateral for loans and if so,what's the average industry standard grace period to be applied before a person's asset can be sold off to recover the loan?
Re: 9 Important Things You Should Know Before Taking A Bank Loan by Nairadays: 7:20am On Sep 14, 2016
Right, and lastly, though it might not apply to everyone; be ready for denial.
Re: 9 Important Things You Should Know Before Taking A Bank Loan by Nobody: 7:20am On Sep 14, 2016
Idiots:
please, how do I collect loan from fidelity bank?
As Google.com

It's your friend grin

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