4 Mistakes to Avoid When Applying for Tax Loans Tax season is approaching. Banks and lenders will soon offer tax loans with comparatively low interest rates. If you are considering taking out a loan, avoid these four common mistakes for more favourable rates and loan terms.
1. Not Researching Your Options
There are various banks and lenders providing tax loan offers. It’s not necessary to rush through decision making process and take the first tax loan offer you receive. Spend more time to research and compare annualized percentage rate, reflective of the real borrowing costs, among different lenders, including handling fee, rebate and any extra hidden charges. Lastly, don’t forget to check out the reviews of the lending institution and make sure the one you go with is considered to be a respectable company within the industry.
2. Taking Too Long to Apply
Do not act until the last minute, or the penalty levied for late tax payment can be costly. To get your loan approved before the tax due date and pay your taxes on time, limit your research and application to a two-week window. Besides, if you had many pulls over the course of a month or two, your credit score could possibly be lowered. Stick to two weeks to avoid any serious damage.
3. Ignoring Your Credit Score
Apart from researching different lenders before applying for a tax loan, credit score should also be on your radar. Good credit rating may help get your application approved as well as a preferential interest rate. If you don’t regularly check your credit report and score, you will have no idea what your score actually is and miss the chance to enjoy better terms.
4. Thinking Discounts Won’t Add Up
Many lenders offer ways for you to obtain discounts on your loan, while some may even offer special monthly rate or discounts for early repayment. That may not sound like much, but over the course of the loan that small percentage can really add up to a meaningful sum.
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