If you’re going to borrow money from a bank, a high street lender or an online provider, thorough planning is crucial no matter the amount you plan to borrow. Debt can be tricky and dangerous not to mention incredibly expensive if you have a bad credit history. If you’re planning to get a personal loan soon, it pays to do your research first. We also have a list of borrowing tips and tricks below to help you along.
Check your credit score
Regardless of the amount you wish to borrow or the type of loan you’re applying for, knowing where your credit score stands is essential. With a clear knowledge of your credit rating, you’ll be able to know which types of loans are available and suitable for your financial situation. That eliminates unnecessary loan applications. You’ll also know what to expect when it comes to your loan’s cost.
Know how much you need
Another important tip you should first thing before applying for a loan is to know how much you need. A rough estimate or a reasonable loan amount range will help you stick with the plan when it’s time to compare loan deals. By keeping this step in mind, you reduce the temptation of borrowing more than what you need and you can afford. While you’re at it, you’d also want to plan how you’re going to spend the money as soon as you receive the cash. If it’s for a medical expense then make sure it goes to where the money is intended.
Examine your budget
Another important consideration when applying for an unsecured loan is to examine your budget. Regardless of the amount, you are required by law and the loan terms to repay said loan as agreed upon. You can’t go on borrowing money you cannot afford to repay. You’ll know how much you can set aside for loan repayments by carefully working out your budget beforehand.
Take time to shop around
There are plenty of loan offers available in the market. Whether you’re borrowing from a bank or online, the choices are vast and diverse, which is why you need to shop around before you sign up for a loan. It works just like with any of your major purchases. Canvass the market, compare similar options and continue shopping around until you find a suitable loan deal that meets both your needs and budget.
Understand the loan’s cost
To lure borrowers, providers often advertise their loan offers as best and cheapest in the market. Don’t be fooled with too good to be true offers. Just because the lender said their loan deal has the lowest rep APR doesn’t mean it’s true. You need to understand your loan’s cost as thoroughly as possible for a clearer picture. That means you’ll have to do your own research to get it right.
Before you sign a loan deal, make sure you ask all the questions you needed to ask. From the repayment terms to the interest rate, hidden fees and more, these are loan-related factors you need to clearly understand if you want the best end of the deal. Call customer service to ask questions and seek for expert advice. You can also ready online reviews and seek recommendations from people you know for added info.
Read the fine print
Even after calling customer service, you may still want to take your time reading the fine print. On the fine print is where you’ll find more information and details that were not disclosed by your lender. Rather than be sorry later, it’s best to read the fine print before signing any credit agreement.