Do you need cash urgently? Are you looking for a better deal the money lending market have for you? It is not an easy thing to get a loan today. So many things come into play. While Credit cards are better, they are not the best due to the high interest rate. Other loans may require you to have collateral and prove your credit worthiness before you qualify for the cash. Personal loan is one of the best deals available for you.
It is easy to get and with reasonable interest rate. An option for non-collateral is available although at a higher interest than the secured loan. So if you want to payoff your credit card, improve your home, settle medical bills, meet your medical expenses or you just want to take a vacation then opt for personal loan. You however should take caution. Read and seek information extensively about the deal before signing into it. Avoid payday loan dealers and pawnshops lest you regret at the end.
1.Understand the loan details and where to get it
There are two options available for personal loan. Collateral loan and non-collateral. The collateral option requires you to attach an asset as security to the loan. The advantage is that a lower interest is charged as compared to the unsecured loan. It however puts your asset at risk just in case you fail to pay the loan. Are you just ready to loose your house, car, property yet? The non-collateral option on the other hand has a higher interest. You pay more since they do not require you to attach any property to the loan. So would you rather risk your property and pay less or pay more and secure your property? Weight your options well. If you have bad credit score, find a co-signer and payoff your credit card ( it will save you when running the credit check). Try the credit unions as well since they have better deals as well.
2.Credit worthy score?
The unsecured loan calls for credit worthiness. Remember you are not required to attach any property. The credit worthiness is determined by your credit history, the frequency and size of your income, existing and settled debts if they exist. If you score highly be sure to get the loan with much ease. Some loaners may even lower the rate since depending on your negotiation skills if they are sure you will pay. Do not risk going for the unscrupulous dealers since your credit worthiness is poor. The option of secured personal loan is still available for you.
3.Know where to get the loan
Majority of the banks and credit unions, payday loaners, peer to peer and credit building groups offers personal loan. They are the safest. Your bank is the most preferred since they have your details and can prove your credit worthiness much easily. Consult with the bank to know their terms. Be specific to the credit scores needed and the rates chargeable on the loan. Some banks restrict issuing information about the rates until you apply for the loan. You can ask for the scope rather than the exact figure. Make a comparison with other lenders before signing into the deal. You could just miss a better deal. The peer-to-peer groups may have higher interest rates than credit unions and banks better have softer restrictions. The bedrock of qualification for personal loan is the income you receive. The other requirements are specific and vary from lender to lender.
4.Always Check Fees , Penalties and interest
Check the prepayment penalties before signing the deal. The penalties are chargeable if you exceed the agreed upon period of your payback. It is safe to payback within a period shorter than the expected time. This will reduce the interest payable on the loan.
Check for the fees chargeable for example overdraft fee and optional fee. Optional fee is charged if the lenders withdraw from your checking account. However, you can deny your lender such permission to avoid such fee. The overdraft fee may accumulate very fast without your notice since it is hard to determine your actual balance. This is because you will not tell when the lender makes the deductions. It is advisable to avoid the automatic payments or allow your bank to notify you on low balance. The best thing is to disallow the lender from withdrawing from your checking account.