“There are times in your life when despite your best efforts you fall short of the funds you need to achieve what you desire. Personal loans can provide a way of achieving what you need in the present by allowing you to pay it off in the future. Whether you are trying to consolidate your debts, booking an overseas trip or need the money to set up a nursery, we will show you what type of personal loans are available so you can feel comfortable choosing the right one, at the right price.”
Whether you’re planning your dream vacation, financing your wedding expenses or just looking to consolidate your debt, you might be in the market for a personal loan. Personal loans are a popular choice because they often feature interest rates significantly lower than those of credit cards and can provide quick cash to help you cover a pressing expense. Below are some questions that you may want to consider before you find a loan and take on this type of financial commitment.
What Is My Credit Score?
If you’re a borrower who has a phenomenal score, you are more likely to receive low interest rates on your loan. Borrowers that fall in the highest ranges have credit scores that reflect reliability and are therefore considered to be a lower risk. On the other hand, borrowers with lower credit scores can often be seen by lenders as a greater risk so interest rates tend to be higher. If you have a low score, you could always consider whether it might be worth it to hold off on applying for a loan. It may make a considerable amount of difference if you choose to raise your credit score before applying. If you’re considering this, you can always utilize our Credit Score Simulator to see how specific actions may impact your score and to find out the best way to get your score up to a more desirable level.
Why Do I Need This Loan?
Don’t lie on your application! Personal loans are used for a variety of reasons and being honest about why you need the loan may lead to some new options that were not previously considered or presented to you.
Secured or Unsecured?
When a loan is unsecured, this means it’s not backed by any collateral from the borrower. Unsecured loans typically result in a higher interest rate because the lender is accepting a higher risk in case of default. A secured loan requires collateral from the borrower, which in turn results in a lower interest rate. Collateral is most commonly in the form of property but could be any valuable asset legally owned by the borrower. Of course, you should never go into the process expecting to default on a loan, but it’s always smart to keep this collateral in mind when choosing the right offer for you.
What’s My Payment Period?
How long do I have to repay the loan and how does this affect my overall payment? Lower monthly payments mean a longer payment period. A longer payment period means you’ll be paying interest rates for an extended period of time, which could potentially translate to a larger interest rate overall. Think about how you should base the term of your loan. Are you willing to reduce your monthly repayments but to pay more interest in turn? The best advice would be to figure out what is the maximum amount of monthly repayments you feel comfortable with, so you can better avoid the possibility of interest rate payments piling up.