The news lately has been chock full of reports about Fannie Mae and Freddie Mac being taken over by the federal government while Merrill Lynch, Lehman Brothers, AIG, WaMu, and other investment banks and financial institutions battle for survival too. For the consumer who needs to borrow money, 
wondering who will approve their loan and at what rate has some concerned.
Fortunately, the financial market is much bigger than these entities with some financial institutions in much better shape than others. Clearly, shopping around for a consumer loans these days involves checking on the health of the lender as much as finding someone who can approve your loan at a fair rate.
Before you submit your application there are four areas where you’ll want to educate yourself:
- Understand Your Options — Should you borrow now or should you wait? How much money do you need? How long of a loan term do you want? What interest rate are you willing to pay?
- Select Best Product — Should you take out a home equity loan or seek an equity line of credit? If an auto loan, will you get your loan through a bank, the financing arm belonging to the automaker, your credit union, or some other source?
- Learn to Negotiate the Best Deal — What fees are involved with applying for a loan? Or, will fees be waived or included in your loan? Will you do better with a fixed rate loan or an adjustable loan? Will you be penalized for paying off the loan early? Does the interest rate on the loan reflect your good credit?
- Save Money and Hassles — Do you want to deal with someone locally or would you consider finding a lender online? Do you want to mail payments off monthly or have the convenience of sending payments off via the internet? Are automated payments right for you?
Consumers should take their time looking for the right financing product, comparing offers to find the best deal available today. Banks, credit unions, savings & loans, and other financial institutions want your business, but not every lender is worthy of your business.
If you’re in the position to borrow money, then you’re in the drivers seat. Negotiate from a position of strength by doing your research before applying for any type of consumer lending option. Reject any offer that isn’t favorable for you or ask the lender for terms which are more favorable to you.
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