What do you look for when applying for a Hoot loan?

At Hoot we want to make applying for a loan as easy as possible, but we feel it is important that you understand what getting a loan with us means.

If you are accepted for a loan you will be asked to sign a loan agreement. This includes the terms of the loan and what will happen if you don’t make the repayments. It is important that you ALWAYS read the terms and conditions of the agreement before you sign.

Here are some of the things you should check before you apply.

Are you borrowing what you need?

Is what you want to spend the money on essential?

Could you wait and save for what you want? Better to ask what you need to borrow than how much you can borrow.

How long will it take to repay?

Longer term loans with lower repayments might cost you more in the long run.

Choose the shortest term that you can and manage the repayments..

What are the repayments?

Your repayments will depend on how much the loan is for, how long you agree to repay it over, the agreed interest.

You should make sure that by taking out the loan you are not overstretched and can afford the repayments.

What interest will you pay?

Your loan repayments will include interest payments (This is called Cost of Credit) and is the amount you pay as your charge for getting the loan.

Add this amount to your original loan and this is what you will repay altogether.

Unlike most lenders, a Hoot loan charges interest on the reducing balance. This means that, instead of front-loading the interest onto your loan, interest is charged daily on the reducing balance; so you pay back less in the long run.

Have you read the terms and conditions?

When you sign a loan agreement, you are agreeing to the terms and conditions of the loan. These outline what you have agreed to repay and how you will repay, plus what will happen if you don’t make the repayments.

With a Hoot loan you are also required to save whilst you repay your loan. How much this is and when you can take these savings out depends on the loan you are applying for.

If you don’t make repayments, the terms of the loan mean we can take any savings to offset some of what you owe should we place the loan in ‘default’. This means we have tried to get you to repay but you have not been able to, or been willing to, make repayments.

Are there any extras?

Many loan companies will charge you if you make a late payment or pay your loan off early. Some also charge a setup or admin fee.

With a Hoot loan there is no setup fee, early repayment or late payment charges. So if you want to make extra payments or want to pay early you can with no charges.

In fact, if you pay your loan off early you will save on interest!

Remember, Hoot loans require you to save whilst repaying your loan. How much you save is depending on the loan you are applying for, or how much you can afford. Some of all of the agreed savings will be tied (cannot be withdrawn) depending on your loan type.

Are you comparing like with like?

APR% will help you compare loans but you should remember to compare only loans that you would be eligible to get.

For example, if you have a poor credit history, comparing with a bank loan with a low APR% that you would need an excellent credit rating for, wouldn’t give you a true picture of what your options are.

Who are you borrowing from?

Are you sure that they are a responsible lender that treats you as an individual?

Are all their decisions automated or will they look at your particular circumstance to consider whether a loan is right for you?

Credit unions are member focused lenders that put your needs before profit.