Red Flags You Should Look Out For In a Loan Agreement

We live in a credit based society. From the look of things, our society is programmed to survive on loan and other credit instruments to survive every challenging day. Homeowners will take a mortgage loan, the entrepreneurs need an industrial and commercial loan, while real estate financing happens to keep real estate investors going. To complement the need for money companies such as Owemanco in Canada provide various loan instruments to meet daily demand for financing.

Financial pressure can make anyone act without thinking when there is an opportunity to get cash to solve pressing needs. However, getting a loan to solve a problem needs meticulous care to watch for red flags before you sign the agreement. Signing unreasonable loan agreement can become many years of regret that will unbalance your entire life.

When you need time-sensitive real estate financing the type you get in Owemanco, not many loan sharks believe in the philosophy of mutual benefits. Despite the urgency of the loan you want and the rush by your financier to provide the loan, it won’t stop the due process and agreement signing from taking place. In such a hurry, there is the tendency to overlook some critical clauses in the contract by the borrower, but this does not affect the lender.

Some red flags are always in a loan agreement that unless you pay close attention, you may not see them. However, before you sign the next loan agreement, look out for the following red flags and don’t sign until you have resolved them with your financier.

 

  1. The agreement contains paying excessive upfront fees. Being asked to pay too much up-front loan service fees is not a good sign you should take without questioning. If you have to pay a service fee for a loan meant to be an investment that is a danger sign that will put you in trouble in the future. Run!

 

  1. No written terms are bad sign. Money comes with a cost and the lender has the right to charge for the use of his money. Before you get a loan, you should know what is the cost and the term of repayment. If a loan agreement isn’t written and details of it spelt out, stay out of such a loan because it might be a booby trap.

 

  1. Interest on loan is more than stipulated by law. There is cost of money and states in the US and Canada has regulations on what to charge on loans. If the interest rate provided in the agreement is higher than what the law says, don’t proceed with signing.

 

  1. Loan terms deviate from standard practice. If you are borrowing from Owemanco and other standard financing institutions you can expect standard loan procedures in your loan agreement. However, many private, hard loan financiers may not go with standard practice, in such instance, you want to consider whatever contract you sign with such lender.

 

  1. Avoid the pressure to sign. A loan is a win-win scenario for the lender and the borrower. You get the loan while they get the interest. Without you, there are no them. Therefore, exercise your right to due diligence and careful scrutiny of the loan document before appending your signature.

 

Owemanco affirms the uniqueness of every borrower to be served individual loan package to meet their desires. It does not apply a one size fit all loan package. If you want to save yourself from stress in the aftermath of a loan offer, you need to look out for red flags before accepting any loan

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