Unsecured Loans: 3 Mistakes to Avoid

Unsecured loans are loans granted without being backed by collateral. Also known as signature loans or personal loans, unsecured loans are increasingly popular with more and more people are asking banks for this type of loan. Before you decide if an unsecured loan is the right one for you, consider the follow easy to make mistakes which could hurt you, your credit report, or your finances.

Mistake 1 - Taking the First Loan you are Offered

When considering an unsecured loan, it is highly recommended that you shop around before deciding which loan to take on. Talk to your bank as well as other local banks.

Mistake 2 - Taking More Than you Really Need

By the time you sit down with a loan officer you should already know exactly how much money you want to borrow. The loan officer may make more commission by selling a bigger loan. Do not let the loan officer talk you into borrowing more than you really need.

Mistake 3 - Not Reading Carefully

Read the terms of each unsecured loan very carefully and do not hesitate to ask questions if you do not understand something. Do not just focus on the amount of the monthly payments; also consider the total cost of the loan and watch out for any hidden or unexplained charges.

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