Most people will apply for personal loans at one point in their lives, but most are unaware of the binding terms and conditions of applying for those loans. We know how important it is for you to know exactly what getting when you take credit, and we have complied some tips to help you make the right decisions when you do decide to apply for loans, whether it’s a personal loan, home loan or car loan etc.
Question 1 – do you really need the loan to begin with?
Most people are in a position of saving money but instead choose to apply for a loan. Getting in debt is not the ideal situation especially when you can rather avoid it. For non-essential items which are luxuries it is probably the best idea not to apply for a loan to get them, and these can be things like shoes, clothes, handbags and so on.
Question 2 – is your credit rating good?
The second important question to ask is whether or not your credit rating is good, and if you are one of those individuals with multiple debts it is probably the best not to get another loan but rather look at getting a consolidation loan instead which will merge all your existing smaller loans into one, making debt management easier for you.
Question 3 – which loan is right for you?
There are different types of loans so it is important to choose the right loan that is best suited for your situation, if you are looking for a loan to buy furniture for example it is best to take a short term loan with shorter repayment terms than getting one with 48-60 months repayments. When you do decide to take a loan consider the interest rates, terms and conditions before you sign the loan agreement form, and also speak to the credit consultant who can assist you in making the right decision and also give you advise on how to manage your credit.
Question 4 – is the credit provider credible and reputable?
Applying for a loan from loan sharks is not always the best thing to do, as they often charge compounding interests that are extortionate and can take extreme measures to get back their money, even putting your life in danger.
If you are in trouble with debt, what should you do?
For those that are just high in debt we wouldn’t advise them to take additional loans, but rather talk to a debt counsellor and discuss different options of managing your debt. For those with good credit standing you should take all the questions listed above into account before you make your decision on applying for a Loan.