There are many reasons why you may want to get a personal loan. It could be buying a car, consolidating your debt, renovating or fixing your home or simply going on a holiday. Before getting a personal loan, here are the things you need to know!
Getting your loan approved
There are a couple of things you can do to improve the chance of getting the funds you need approved.
Check if you meet the criteria, such as be at least 18 years old, meeting the income requirement, receiving regular income and having a good credit rating!
You also need to make sure you borrow the right “amount”. You should NOT borrow a huge amount of fund that could leave you with long term debt. There are many online borrowing calculators you can use which will give you an indication of how much you should or might be able to borrow. The calculators would require you to provide information such as your income level as well as your lifestyle/ expenses.
As mentioned above, you need to proof that you have a good credit rating. To achieve that, you need to ensure you pay your bills such as your phone, internet and electricity on time as these can contribute to having a good credit rating.
If you are looking for additional ways to demonstrate you are financially responsible, you can also consider showing them that you have regular savings. For example, if you can show them that you save a certain amount of money every month for a long period of time this will also help to increase the chance of getting the loan approved.
Getting the best personal loan
Getting a loan is just like buying a car, if you do your research and shop around for the right personal loans it can save you thousands in interest and fees.
You also need to consider if you like fixed or variable interest rate. For fixed rate, your repayments are fixed and won’t change over the loan period. On the other hand, variable interest rate means that your repayments will change if the interest rates change. With variable interest rate, your repayments will be higher if the interest rates go up and your repayments will go down if the interest rates fall.
There are also secured and unsecured loan. With a secured loan, you will need to provide an asset such as your car as security for your loan. If you don’t pay the loan back on time the lender can reposes your asset and sell it. With an unsecured loan, you don’t have to provide an asset, but the interest rate will be higher, and you may need a loan guarantor.
When comparing loans, these are the features you should look at:
Interest rate, application fee, other/ hidden fees, loan term and loan use as some loans can only be used for specific things.
Again, there are many websites you can use to compare loans!