Are you thinking of taking out a personal loan! If the answer is
yes then you have to ask yourself some questions first. This
will make sure that the loan you choose is the right one to suit
your needs.
Below are some of the most common questions you should be asking.
Do I really need a personal loan? You have to ask yourself if
the purchase you are about to buy is necessarily, as you may
have this debt for a year or two.
Can I afford to takeout a personal loan? This is properly the
most important question you will have to ask yourself, debt
advisers says that a non- mortgage monthly repayment debt should
not be anymore than 5% of your net income. This is the total you
walkout with after tax, say you take home £2000 a month then the
most you should be paying back is about a £100 a month.
How much should I borrow? Most lenders offer a cheaper APR on a
larger loan; each lender has their different levels of interest
rates and will change them with accordance to how much you
borrow. Sometimes it's best to up your loan just a small bit to
get the best interest rate. For example maybe you only want a
loan of £4.500 your APR maybe 10.5% but if you go for a £5,000
loan the APR drops to 9.6%. So over all you may end up saving by
taking out a bit more just something to watch out for.
Where do I go for a personal loan? Most people think of the bank
first nothing wrong with that, but know there are so many places
to look. Everywhere you turn you see adverts for loans including
the newspapers, TV, mail, supermarkets and the Internet. The
competition at the moment from the lenders is great; they all
want your business so there are some great deals on offer. You
just have to look for them take your time and you are sure to
get the best deal around
Will I be covered if I become ill or unemployed? Most lenders
will have PPI (payment protection Insurance) please check the
policy carefully and ask questions. As not all these policies
will cover you and they can be expensive, sometime it's best to
shop around for a different policy.
Can I pay my loan off early? Yes you can and unbelievably 60% of
people do, again check with your lender as some add on penalties
for paying off your loan early. Some lenders charge two or three
months interest unbelievable but true.
What happens if I get turned down for a loan? First check why is
it because your credit rating is poor or is it because you're
asking for too much money. If your income is low you may be
asking for too much, if this is the case reduce your request. If
it's poor credit rating check out why and try and sort that out
first, before you reapply
Hopefully these answers will help you, just remember workout
what you need the loan for first, then make sure you can afford
to make the repayments. Take your time when looking for your
personal loan, as there are some great deals out there at the
moment.
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