Top Five Things to Look for in a Loan

1. Annual Percentage Rate (APR) - At the end of the day the amount of interest you pay for a loan is the most important aspect of borrowing money.

2. Repayment terms - Carefully review your lenders repayment terms. Getting hit with a prepayment penalty or a balloon payment when not expecting one is a surprise best avoided.

3. Penalties for late payments - Sure the bank will levy a "fine" if you pay late, but there is no reason you should immediately pay a ridiculous default APR or astronomical fees for one late payment.

4. The size and reputation of the lending institution - Size matters...sometimes. Some big banks are known for horrible customer service, so are some smaller lending institutions. If you don't feel comfortable with loan terms or you loan officer take your business down the street. Very rarely do you need the money so bad you'll deal with any offer that comes along. If one person will lend to you so will somebody else.

5. PMI Insurance (for mortgages only) - If your down payment on a home is less than 20 percent of the appraised value or sale price, you must obtain private mortgage insurance, known as PMI, with your lender. This will enable you to obtain a mortgage with a lower down payment because your lender is now protected against any default on the loan. Read more.