Red Flags When Financing Equipment
Too often, we speak to D.C.s who find out they're locked into financing contracts through banks, vendor-sponsored programs or private finance companies that have unfavorable terms. Coming equipped with the right questions will help you avoid a similar situation.
Posted in Equipment Financing & Loans on Saturday, April 8, 2017
Consider asking these questions to uncover red flags before signing your next lease or loan contract :
- What is the term of the loan and how much is the monthly payment?
- Is there an end-of-term buyout? If so, how much is it?
- Do I have to notify you at the end of the lease/loan to complete the buyout?
- Is there an application fee?
- Is the application fee refundable?
- Is there a commitment fee?
- How much is the documentation/origination fee?
- Is a security deposit or interim rent required?
- Are there prepayment penalties if I choose to pay off early?
- Am I allowed to pay off early and thus save on interest expense?
- Are there any fees to access account information?
- Do they have forced-placed insurance?
- How is the payoff amount calculated and is future interest or fees included?
Remember, when signing any kind of contract or obligation, the more information you have, the better decision you will make. You should always ask detailed questions and choose an organization you can trust.