9 Tips to Consider Before You Apply For a Personal Loan
Sometimes, circumstances warrant you seeking a personal loan. Personal loans are a type of installment loan where you borrow a fixed amount of money and pay it back with interest in monthly installments over the life of the loan. An advantage of personal loans is that most times, they do not require collateral and once you have paid the loan in full, your account is closed.
Nonetheless, in as much as personal loan has its perks, it is advisable that you take into consideration certain things before rushing to that institution to get the loan.
- Evaluate your need before taking the loan
Before rushing to any financial institution to get a personal loan, you might want to evaluate your need. Are your need really needs or want? Is there no other way too finance your project? Loans are huge commitment, so ensure you really need the money before accessing the loan. If not, accessing a personal loan that is no for a very important need is just the next bus stop before financial crisis.
- Shop around
Before you get a loan, do thorough research, weigh your options, talk to people who got personal loan and ask for expert opinion if available. Don’t just go to the first lender who approaches you with a personal loan, hunt around. You can equally go online to check for prospective lenders and what they have to offer. Visit www.o3cards.com for further information on personal loans.
- Don’t submit multiple applications
One thing you should never do is submitting multiple applications for personal loan. Asides the fact that it has an adverse effect on your credit score, it also leaves an impression on your lender that you are desperate for funds and might not be fully equipped to repay.
- Assess your eligibility
The saddest thing that could happen is applying for a personal loan, having a perfect credit score and being turned down because you were ineligible. That is the definition of an effort in futility. Always find out if you are eligible or not in terms of your employment, income to access the loan and other important requirements.
- Make sure your credit score is perfect
Your credit score plays a vital role in your getting a personal loan. Given that some personal loans do not need collateral; the risk is much higher for the lender. Therefore, the lender tends to favour applicants who have a higher credit score as this is an evidence of better repayment capacity on the part of the borrower.
- Request for Pre-payment
Some lenders allow their borrowers to pre-pay their loans, although with extra charges. It helps to save you from the high interest rate which you would have to pay. So when requesting a personal loan from a lender, make sure you ask about pre-payment.
- Be careful about allowing automatic withdrawal
Some lenders request borrowers to provide access to their bank accounts for automatic withdrawals of their monthly payments. It is advisable that you opt out of this arrangement. If you provide access to your bank account, you might just find yourself out of money when you need it.
- Ask for help
A lot of people feel too embarrassed to ask for help with regards to financial matters. Like the adage says, ‘a problem shared, is a problem half solved’. So, do not be afraid to ask where others got their loan. Ask your friends, family on who they recommend for personal loan.
- Apply after 6 Months
In the event that your loan application has been rejected by the lender, wait for at least six months before reapplying. In those six months of waiting, endeavor to improve your credit score.
There you have it; the important tips you must consider before you get that personal loan. Visit us at www.o3cards.com for more information on personal loans and other additional services.
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