If you are in need of immediate cash and currently have a decent credit score, most banks and other financial institutions will be willing to offer you a personal loan. The eligibility to apply for this type of loan varies from lender to another, and is based on your income, credit score, age, and overall financial stability.
People apply for personal loans for a variety of reasons. You can use a personal loan to invest in business, pay for unexpected medical emergencies and even fund your upcoming vacation.
Here are a few things you should take note of before you apply for a personal loan:
Determine the type of loan that you can afford.
The payment length and amount of the loan are important factors to consider, as the interest would build up over time. This is very risky, as you would not want to be burdened by a high amount of interest in the long run.
Policies implemented on the loan.
Personal loans attract many people because they are more negotiable, in terms of the rules of payment, and the length of time to pay off the loan. Be careful still, as different establishments have different rules and regulations. What you thought may be a harmless decision may be a critical cause for penalty if you don’t read the fine print.
Making late payment and penalties.
Paying your loan is one thing, paying it on time is another issue. These penalty rates are forms of reminders to encourage borrowers to pay on time and right on schedule.
Most credible lenders will assist you, should you need an extension. But be cautious because this can also mean they can charge you with high-interest rates. Not only will you end up paying more, you’ll also be paying your loan longer. Which is why it is important, that from the beginning, you’ve already set up a budget and a strategy on how you’ll be paying your loan off. Setting up a budget will not only help you stay on track with your payments but it could also save you money by avoiding the penalties that go with late payments.
Need a co-signer?
A co-signer will be necessary if your credit is poor, or if you can’t provide some type of security or collateral. Certain lenders will require a minimum credit score in order to receive a personal loan.
Other risks that come with personal loans.
Payments for personal loans are fixed; therefore you need to make sure you can pay it back on time. Find a credible loan provider that is popular and has good reviews, as there are scammers out there trying to get money.
Beware of hidden fees.
You’ll want to check not just the interest, but the origination fee. The origination fee is what the lender is charging to pay for the processing costs of your personal loan. Depending on the lender, fees can be close to 5%. Make sure to check the total amount you’ll have to pay, with all fees included. Certain lenders will charge if you pay your loan too quickly.
Analyze the total costs.
When searching for a personal loan, you’ll want to make sure to compare total costs of loans, as opposed to interest rates alone. You might find that a lender has better interest rates, but a much higher origination fee. Speak to different lenders and take your time finding the best option.
Apply for your very own loan with a trusted name that offers only the best service possible. Cebuana Lhuillier’s Lucky Loan should definitely be your top choice. It is a multi-purpose loan offered to registered entities such as tricycle operators, credit cooperatives and other groups, as well as SMEs such as restaurant and mini groceries, among other businesses. Our more than 2,000 Cebuana Lhuillier branches and online presence give customers unlimited access and convenience in applying for a loan.