Loan shopping that goes beyond interest rates

When it comes to financing any purchase, you have plenty of loan options available to you. You may think that the interest rate is the most important factor to consider as you compare loans, but there are other factors that could affect your final loan decision. Let’s review a few of these.

Loan terms and monthly payments. Loan terms and monthly payments are intertwined. The longer your loan term, the smaller the monthly loan payments. The shorter your loan term, the larger the monthly loan payments. With a shorter loan term, you usually end up paying less in interest.

Final payments. Consider how your final payment will and can be made. Is there a required balloon payment, which is typically a large final payment to close out the loan? Also, research whether you can pay off the loan early without a penalty.

Budget and need. Can your budget handle another loan payment? Additionally, consider how much you will pay in principal and interest over the life of the loan. Then consider if you truly need or want to take out a loan. If it doesn’t seem practical at present, consider opening a special savings account for the funds you do have and to get your nest egg growing.

Here at First Utah Bank, we can make this loan or savings account process smooth for you. Visit our website to get started.