5 Factors to Consider While Applying for a Personal Loan

There are a humongous number of companies providing loans and to be specific personal loans to people. They provide several schemes which benefit people from each and every age group and all economic status present in the society. So, whether you are old or young, male or female, working or owning any business, you should try for a loan if you require.

Coming more in-depth about personal loans and factors that might be useful for you to select one of your kind, let’s get to the basics.

What is a personal loan?

A personal loan is a type of loan which is taken and given mainly for some specific uses. This loan allows you to borrow cash for your own personal needs. In this type of loan mainly comes the loans for a wedding, education, house buying or renovation, car buying etc.  It is a type of legal loan which is meant to fulfil your daily necessity with ease. Though there are procedures and paper works that require certain fixed time to get completed before, if someone says I need a personal loan fast, then depending on the urgency of the situation the task is being carried out.

Now if you too want to go far taking any personal loan, there are many things or factors which you should keep in mind before you finalize your loan. Let us know 5 very important such factors in some more detail.

1-The advertised interest rate or EIR: starting from processing fees to all the charges that you’ll pay while getting a personal loan comes under effective interest rate or EIR.  Before you apply, you should check this all thoroughly and understand how it may impact your future budget. If you find that the total payment made by you after taking the loan including the EIR would not affect you anymore after the present condition gets improved or over, you may choose the selected plan as per your need. However, if you find that the loan is a bit more costly after calculation, you should rethink it. You may choose any such loan whose aggregate monthly instalment you can easily pay. If you are finding the same loan for the same period in any other banks at lower EIR, definitely you should consider that and for doing this all, you need to check such loan in all the banks which provide the loan and choose your best one.

2-The right amount of loan: Don’t spend the money you don’t own. It is the task of a bank to manipulate you to take a loan that costs higher than your monthly income, sometimes it even exceeds 4 times your income. But it is your duty to make wise decisions while selecting the amount of money to invest. Note that you should not feel burdened while repaying your loan, the lesser the amount, the lesser the interest. Therefore, before applying for any special loan, you should check if you need that amount or any lesser amount of loan can work for you. Generally, it’s very clear on our own to choose which loan would be best for us when the amount of the loan is not more. But when we can’t exactly imagine the amount, it becomes a great headache after taking the loan. So in such cases, you should ask for the help of any financial advisor. He will not just suggest the best amount of loan but he will also tell you some other beneficial info about the processes of loan approval and repayment of it.

3-The apt monthly instalments for you:  the longer the repaying time period the more the interest you need to pay. So don’t divide your payment period for too long, instead get rid of them as soon as possible. Manage your monthly income in a balanced manner where all your needs and wants are fulfilled, savings are secured along with the loan you’re repaying. Nothing should be compromised. Select the shortest time period possible of the repayment period. Save time to avoid living under pressure. Remember that you are making decisions, not for your single self but your entire family. If you will do all the things in a hurry, chances are more that you may get stuck in the repayment of instalment for a long period and hence, not just you but your whole family may get into the effect of it. So, choose the shortest possible duration to repay and stay carefree about all worries.

4-Charges included while getting a personal loan for yourself: along with going through the terms and conditions, one should also get fully submerged in the fees involved in it. Don’t ignore those tiny written notes, as one mistake on doing so will add up and have the ability to take up your entire bank balance. You don’t unnecessarily want to pay for something you don’t know or need, right!? So it would be recommended that before you reach the final decision of confirming the loan selection from your side, you should read every document and especially the terms and conditions sections. If you follow this could avoid paying any extra charges, which no one wants to pay actually.

5-Other options except for personal loans: say if your application for taking personal loan rejected Singapore or you don’t get the desired loan, there are other options to opt for. If your loan was for renovating or buying your own house, then you can consider a home loan, renovation loan or SME loan. Just like these, there are many different types of loans also which may give the same benefits like personal loans and without giving you the extra burden of extra repayment with fewer terms and conditions. So take a wise decision and get only the best loan which fits your need, budget and repayment exactly or almost in the same manner you want.

Hope you got some required help with this post.