There are many reasons to consider taking out a loan for the first time. Maybe you’d like to consolidate your debt, pay for a construction project, or are dealing with an unexpected emergency. Whatever the case, it’s possible to handle the situation smoothly with a loan through a financial services provider. Here’s what you should know if it’s your first time applying for one.

A Guide to Applying for Your First Loan

1. What You’ll Owe

What you owe each month will depend on what you need and how much you can independently invest in your project before the loan. For example, you might put a substantial down payment on a house before taking out a mortgage loan. That will result in lower monthly payments because the principal amount borrowed is less than it would be if you hadn’t added your own funds.

Ultimately, it’s less about what you can afford to pay at the moment, and more about whether you can pay the entire total loan amount over time. That includes the amount you borrow, plus interest that accrues during the term. Be honest with yourself so that you aren’t caught off guard by interest and other fees.

2. Your Credit Score

Financial services providers will need to run a credit check to determine if you’re a reliable candidate for a loan. If your history shows that you’ve made late payments on credit cards in the past or that your utilization is too high, that’s usually a red flag.

It’s smart to build up your credit so you can comfortably qualify for loans without fear of your financial history. At the very least, be aware of your credit standing and be prepared to speak in depth with the lender about your options.

3. Specific Loan Terms

A loan estimate provided by your financial services provider will include all of the information needed to make a smart decision, including the amount that you’re borrowing, the interest rate and monthly principal, and any interest owed. A balloon payment might be due in some cases—this will also be included in the document. Since prepayment penalties are sometimes enforced if you pay the loan off early, those details should also be addressed.

Whether you’re about to purchase a new property or embark on a home improvement project, you can trust the loan professionals at Armstrong County Building & Loan Association to offer an appropriate solution. Based in Ford City, PA, this financial services company offers several options, including mortgage, construction, and savings loans. Visit them online to learn more about how to get a loan, or call them at (724) 763-7137 to speak with a representative.