Every financial adviser and professional will likely have an opinion about loans, but so do most laymen. If you ask most people whether it’s a good idea to take out a loan, they’ll almost certainly have an opinion on the matter, and that opinion is very likely to be a strong one as well. However, there’s a lot of misinformation floating around out there about loans and whether they’re good for your financial situation or not. Here are 10 things you need to know about loans.

1. Every provider is different.

It’s easy to lump all loan providers together, but the fact is that just like any other business, every loan provider is different. Each one offers different rates and benefits, and each one has different terms of repayment that you need to pay attention to. That’s why it’s important to make sure you go with a reputable provider, like Loans2Go, which has a strong reputation and favorable terms. Make sure you’re doing your research and picking the right provider before opting for a loan.

2. Your credit score matters.

While many people don’t actually check their credit scores, if you’re going to take out a loan, you’ll need to know what yours is. You can use a number of different free sites to check your credit score; it doesn’t cost anything and can be done in minutes, and the information you receive in return is incredibly valuable, so it’s well worth doing. You’ll need a strong credit score if you want to take out a loan, too (although there are some providers who will give you a low credit loan).

3. There are lots of different kinds.

If you’re taking out a personal loan, you might be surprised to learn that there are actually lots of different kinds. For a start, there’s a difference between secured and unsecured loans; whether you fix the value of the loan against something you own or not matters immensely in terms of repayment conditions. There are also various kinds of loans based on which provider you go with, so again, make sure you’re doing your research before you commit.

4. Loans can sometimes help you in ways you don’t expect.

There are, of course, obvious benefits to taking out a loan. You get a quick cash injection that can help you to get yourself out of a financially troublesome situation, so the immediate benefit is clear. However, taking out loans can sometimes also help you in ways you don’t expect. For example, did you know that taking out a loan and paying it back promptly can sometimes be better for your credit score than never taking out a loan at all?

5. Many providers will negotiate.

If you’ve taken out a loan and you feel like you’re completely unable to pay it back, you may think that you’re out of options, but this is not the case. Many providers will actually negotiate with you about a new repayment plan or even cancelling the debt, although the conditions will have to be agreed upon, and this can be difficult without an official legal representative present. The point is that if you’re unable to pay back a loan, it doesn’t have to be the end of the world.

6. Loans aren’t free money.

We know that this might sound obvious to you, but there are many people who think of loans as free money, and that’s simply not the case. A loan will have to be paid back, and the interest rate on said loan will usually make the amount you’re paying back much higher than what you originally borrowed. As such, you should think of a loan as a necessary obligation or commitment you’ll have to make rather than an easy get-out-of-jail-free card. Speaking of which…

7. Loans won’t lift you out of serious financial trouble.

If you’re experiencing serious, crippling debt, then taking out a loan is probably not the best option for you. While the initial injection of cash might help you in the short term, you will eventually have to pay the loan back, and you might find that you end up in more serious debt than you originally had before you took the loan out. Before you consider a loan, speak to a financial adviser to determine whether it’s the best course of action for you and your unique situation.

8. You can take out specific consolidation loans.

Many people have loans from a number of different sources. If that’s you, then know that you can take out a specific consolidation loan that will help you to collect all of those different debts in a single space and pay them off more effectively. Consolidation loans won’t wipe out your debt, and they aren’t always better than simply continuing to pay multiple loans off, but they could be an option, so make sure to look into them if you think they might benefit you.

9. Paying back loans early can cost you.

While it might seem like a good idea to pay back a loan early, the truth is that many companies make a lot of their money from the interest on loans, so they want to collect as much interest from you as possible. As such, your loan might have an early repayment penalty that stops you from clearing the amount too quickly. It’s worth checking to make sure that your loan doesn’t have something like this before you decide to repay it early.

10. “Credit-building” loans exist.

Being saddled with a bad credit score doesn’t necessarily have to mean you can’t take a loan out. There exist “credit-building” loans that are specifically designed to help you build up your credit score. These loans are unusual; they don’t give you the amount right away, instead asking you to make repayments until the end of the loan term, at which point the funds are released to you. They’re just for building credit, so you shouldn’t think of them as a traditional loan.