This article contains a list of real mistakes people make when choosing a loan, which led them to bad consequences.

Mistake #1 – Listening to and trusting the advice of well-meaning bank employees
You must remember that bank employees’ remuneration depends not on “usefulness of their advice”, but on the amount of money earned from the bank customers (services imposed on the loan, insurance, commissions, etc.).
Expecting a bank employee to give honest, helpful advice makes no sense.
Example – insurance for the borrower in case of disability and inability to pay the loan: the first lines of the contract says that in case of disability the debt of the borrower pays the insurance company. There are dozens (!) of situations in the “exceptions” section, when the insurance does not work (for example, in case of “oncology”). As a result, the borrower, having lost his health and paying the insurance, still have to pay the loan with interest. The bank employee will be silent about this, because about 50% of the money paid for the insurance will go to the bank (the rest to the insurance company), and some of it will go to his premium.

Mistake #2 – the borrower doesn’t consider several loan offers, but takes the first one he sees
Statistics show that if you are going to take a car loan or mortgage, 2/3 of would-be borrowers consider different options (this is the right approach), and if a cash loan or a consumer loan, it seems that people thoughtlessly grab what is given. And for nothing. The main mistake a would-be borrower makes:

The borrower thinks he or she won’t become a debtor; he or she has everything “covered.”

But, as I wrote in the beginning of this article, ALL debtors, while still only borrowers, do not plan to become debtors. So when choosing a loan, always pay attention to the terms of delinquency: what are the fees? Penalties? Read online reviews of how this or that creditor collects debts.

Are you a reasonable person?
All the stories and smiles of a bank employee are not worth a penny, this is a way to lure you into taking the loan. Clearly remember 4 points:

1. If one bank is willing to give you a loan, then other banks will be happy to give you a loan, but you must compare their conditions.
2. When choosing a loan, read the reviews of the lender, and then you will know what kind of a person you are dealing with.
   Do not be shy to “exploit” the bankers – let them print out the agreement (tell them you are ready to sign it only after reading it) and then refuse to sign it if you are not satisfied with the two figures which will be hidden from you until the last moment:

The “total cost of credit” (circled in a box at the very top of the first page of the contract). If it is much higher than the rate you were told before, you are cheated;
A payment schedule (can you “afford” the overpayment and monthly payment?).

4. Do not agree to the imposed services, refuse them clearly.
   When applying for a loan it is a good idea to use your phone as a recorder (in a bank office), and when applying for an online loan it is worth making copies of the screen with the selected services.

Remember:

You don’t just want a loan, you want a loan you can pay back.