5 Valuable Facts When Getting A Personal Loan

5 Valuable Facts When Getting A Personal Loan

When you find yourself in a situation where you need extra money to be used for an emergency or large purchase, most often a personal loan comes into mind. Getting a personal loan can be both good and bad. To avoid any bad outcome on getting a personal loan. Having knowledge is the best way to go about it. Here are some facts about personal loans that can help you weigh in on your decision to get one.

  1. Keeping your amount to be financed at a minimum brings a better deal. If you have extra cash that you can spend, use it and just get a personal loan to add for the amount that comes short. Having a lower amount of loan creates a lower interest rate and less cost on borrowing the money.
  2. Only take the loan when you really, really need it. Don’t get a loan on a not so important matters like buying clothes from any online shopping store when you have the extra cash you can spend. If your extra cash is just sitting in a bank or even under your pillow, use it instead of getting a personal loan. This will save you a ton of money paying for interests.
  3. Research on lenders and banks who can give great deals on personal loans. One way to take advantage of the age of internet is having the information very accessible wherever you go. Researching on your lenders and banks can help you find the best deals available.
  4. Work on the 3 C’s that your lenders will look into. The 3 C’s that money lenders in Singapore and other bank look into are “character”, “capacity”, and “credit”. Lenders and banks will want to know the character of the person they are dealing with. They will definitely investigate on your capacity to pay and how you deal with credit. If you want to make sure you get the loan approved, work on your 3 C’s.
  5. Reading your contract and other documents before signing can save you more than you can expect. These contracts and documents often have fees that can be done away with. Reading before signing allows you to be able to negotiate and let go of any fees that are not really needed in the loan application.

5 Facts About Payday Loans

5 Facts About Payday Loans

Payday loans are one of the most common loans that are being offered in the market today.  Unfortunately, people who borrow payday loans mismanage the debt and often fall into the trap of spiraling debt that keeps them from getting back up. Instead of looking form more income, what happens is that they go into more debt to pay existing debt. This rolling debt becomes one big liability that borrowers fail to manage.

Understanding about payday loan can help you avoid getting into the trap and allow you to maximize the use of a salary loan.

  1. A borrower of a payday loan often ends up rolling off existing debt for a new one. Most payday borrowers, according to statistics, roll over their credit to the next period and often makes a payday loan up to 8 times in year. This creates more fees to be paid and higher cost on borrowing the money.
  2. Around 60% of payday loan borrowers end up paying more in fees than the total amount loaned. This is because the borrower keeps on rolling over the debt where interest applied monthly includes the previous months fees and principal amount. Remember that payday loans are intended to be paid on a short term, rolling it over and treating it as a long term loan can grow the fees to unreasonable amounts.
  3. Many payday loan borrowers end up paying the entire debt after 3 to 4 months by rolling it over despite having it due within 14 days. Because of poor management, borrowers tend to liquidate the entire debt way beyond the original due date and only roll over their loan every time it becomes due.
  4. Payday loans are one of the youngest loans that emerged hence improving along its journey. Because of its young nature, payday loans are so flexible since limited regulations apply to it. Most payday lenders can contest on areas where there is no specific regulation.
  5. Payday loans are so easy and accessible that their number increases drastically every year. But despite of how easy getting a payday loan is, it is very important that a borrower approaches a licensed lender or even a bank. This will ensure that the borrower is protected and that the lender is operating under proper regulations.

4 Questions You Need to Ask When Getting a Payday Loan

4 Questions You Need to Ask When Getting a Payday Loan

You have your salary used up for paying out all the bills and expenses that are budgeted to be paid for the month. Unfortunately, there is a health emergency that has occurred that you have encountered. Getting a payday loan can often help you bridge the gap between income and expenses. These are ways you can use to help you get by.

Payday loans are easy to get loans that have simple processing. Often, these loans can be approved and released within the day. Getting a payday loan may sometimes be the best solution, especially for expenditures that involved time constraint. But before you do get a personal loan, here are a few questions you can ask to make sure you are making the right decisions.

  1. Is payday loan the only thing I can resort to?

We often find ways on how to manage our income shortage and I discourage getting a payday loan unless it’s the last option you have. Try borrowing from friends or family first or trying to find an alternative loan. Borrowing from family and friends can often get you off the hook of having to pay for interest.

  1. How much do I pay back?

Understanding how much the total cost of your loan is will help you get motivated to pay it back. Soon as you find the amount you need to pay compared to the amount you received, it is something that will encourage you to work it off and pay your loans.

  1. How much do I need?

You will need to understand how much you need. If you can compute for the exact figure, get the exact figure and make a loan amount for that figure. Understanding how much you need will help you minimize any additional cost. If you borrow too much, you will end up paying for the interest on the excess amount.

  1. How much can I borrow?

Knowing how much you can borrow will give you an idea of the value your current credit has. Having a very low loan amount only tells you that you need to reevaluate your credit worthiness.