A personal loan allows you to carry out your projects, whether it is furnishing your home, wedding, or a trip around the world. However, it should not be forgotten that a loan commits you over several months, even several years. Therefore, it is essential to choose your loan carefully and avoid the mistakes you should not make. In this article, we shall elucidate crucial things to consider to get a personal loan.
Do Not Compare Credit Offers
The first mistake many make is not to compare credit offers before applying for a personal loan. How do you know if you are getting a good deal without knowing the prices on the market? Some people speak directly to their bankers without even negotiating or competing. This error is probably the one that will make you pay the most for your credit.
How to cure it? Before you even apply for credit from banks, use an online personal loan comparator to compare the best deals on the market. You will know which are the most advantageous rates which you can claim. Then apply to three credit agencies for the best chance of getting your loan at the best price. If you prefer to borrow from your current bank, don’t forget to negotiate with your banker. He will surely be ready to lower his rate so as not to lose a good client.
Do Not Take Into Account The Total Cost Of Credit
The nominal interest rate offered by the financial institution is not enough if you want to compare loan offers or calculate the total cost of your credit. To this, it is sometimes necessary to add any additional charges, such as administrative costs. To compare and determine the total cost of your loan, you must use the APR, the annual effective annual rate. This rate takes into account all the elements of the total cost of your credit: interest charges as well as additional charges.
Note that with the Internet’s possibilities, it is now possible to take out a personal loan 100% online—no need to go to the agency multiple times or send your file by post. Financial institutions offering to take out online credit will not charge you any administrative fees. Beware, however, of fraudulent offers that are increasing on the Internet. For a list of trusted online credit agencies, you can check online.
Do Not Increase Your Credit With Unnecessary Insurance
In Singapore, credit insurance for disability – death is compulsory in the case of a mortgage but not in that of a personal loan. Despite everything, the bank will systematically offer you insurance. If your credit is small and of short duration, it is advisable not to take out this insurance because it will unnecessarily increase your loan.
If, on the contrary, you want to borrow a large amount over a long period, you can think about it. Note, however, that you are not obliged to take out your insurance with the establishment where you contract your credit. Again, take the time to compare insurance to get the most advantageous offer.
Do Not Provide A Safety Margin
The personal loan helps you finance projects that you would not be able to afford without this financial assistance or even overcome a temporary difficulty. Although credit has many advantages, it is not a quick fix. You will need to be able to repay your monthly payment and interest charges for the months and years to come.
So, make sure you can repay your loan while meeting your daily expenses. For this, the total amount of your monthly repayments must not exceed 30% of your monthly net income.
We believe you are well equipped to choose the best loan for yourself with the wealth of information we have released in this article. We advise you subscribe to licensed money lenders like Crawfort micro-loan providers for the safest and easiest loans.