Tips for borrowing money or getting a personal loan
If you’re like most people, chances are you’ll need a personal loan at some point to make ends meet. Situations arise when there’s an emergency to sort out, hospital bills to be paid, school fees or rentals. Whatever the case, these are some of the financial challenges people face every day. Borrowing money from either a person or institution is a big step financially that shouldn’t be taken lightly. That’s why we’ve gathered a few handy tips to help you before you borrow money or take out a personal loan.
1. Evaluate Your Need Before getting a Personal Loan
Deciding why you need to borrow money, to begin with, is perhaps the most important factor to consider. Assess the requirement which you need the money for before you decide to take a personal loan. Rule of thumb is to make sure that the money you are borrowing will be used for productive purposes. It is unwise to borrow money needed to pay for school fees for example, but then use the money for partying. Such would just land you in more debt and more problems. Remember that every loan taken out is a commitment to pay monthly for the specified term of the loan. Meaning, that’s an added expense to your budget, along with interest. So, make sure you use your personal loan money wisely.
2. Do Your Research
Before you apply for a personal loan, do some thorough research for all available options on the market. Don’t just blindly go for the first lender who approaches you with a personal loan offer. Shop around to see if you can get not only lower rates but good financial service and advice. Check if the lender offers quick approvals, provides financial advice and of course, lower rates. You’ll be saved from emotional and mental stress by getting the right offer and service. Also, ensure that the loan you choose is one which suits your requirements.
3. Make sure you are eligible for the Personal loan
Different lenders have different criteria and requirements for eligibility for loan applications. Check with the lender to find out whether or not you are eligible for the personal loan. Most especially in terms of your income and employment. Your income is one of the most important criteria lenders use to determine if you can borrow from them. It is an indicator of whether or not one is financially able to repay the loan or not.
4. Don’t borrow more than you can afford
People get excited when they see that they can access sums of money at their disposal. They tend to forget that the money borrowed will have to be paid back, with interest. You should gauge your financial situation before you borrow any money or take out a personal loan. Do the math – when is your next salary and how much can be deducted from it every month?
5. Always pay your Loan on time
Paying your debt in time gives you a better credit score. And having a good credit score gives you a better chance to borrow from most lenders. Your credit history and other factors that determine a high credit score builds good will for you with lenders. It is also, just good practice to pay back in time that which you owe. If for some unforeseen circumstance, you are unable to pay in time, best to inform your lender well in advance. Make sure you understand the penalties involved if you pay late. PremierCredit offers a ‘Pay later’ Facility to help you in paying back your debt.
6. Read and understand the terms and conditions
Before you sign on the dotted line, be sure to ask for a full disclosure of all the loan terms. You should always read the fine print and ask as many questions as you can. Get a full understanding of the re-payment process and any extra charges that may be attached to the personal loan. For online loan applications, check for the Terms and conditions on the lenders website. Also, check out the FAQs page for further clarity on things you might not understand.