7 Tips for taking out a personal loan
Need a little extra cash and thinking about taking out a personal loan? Here are three tips to help you decide if it’s the right option for you.
If you’ve decided that a personal loan is the way to go to get that extra needed cash, here are a few tips to make borrowing money from your bank a little easier when those monthly repayments start to hit.
1. Choose the right personal loan option
- Be honest about why you want to take out the loan. If you give the bank manager details, they might be able to give you something to suit your exact needs, like a student or car loan.
2. Consider alternative finance options
- Always think twice about whether you really need to take out a personal loan, or whether you can find alternative ways to finance your needs.
3. Take out one personal loan at a time
- Try to apply for only one loan at a time. If all the financial institutions you apply to look into your credit history at the same time, you may look desperate and end up getting a higher interest rate.
4. Know the interest rate and repayment terms
- Do your research and find out what the standard interest rate is. Don’t be fixed on the amount the bank is loaning you, focus on the interest that you have to pay back
- Ask what the total repayable amount will be, and if there’s a time limit in which you have to pay back your loan.
5. Loaning a small amount
- Have you considered that a credit card might give you better rates?
- If you need smaller amounts of money at a time, a credit card may be a better option.
6. Take out Personal Loan Protection Plan
- Think about getting a Personal Loan Protection Plan for your loan, so you’re covered if you’re unable to pay your monthly repayments.
7. Check your credit history
- Before you even apply for a personal loan, first check your credit history and make sure that it’s in good shape.