Tips on Personal Loans

All of us at one point of time are short of cash for what we assume is a very important purpose. Putting aside the purpose of the loan, all of us do need some financial help or the other in our lives for personal reasons. The reason could be to buy something new or pay for something which we already have but are lagging behind on payments. Whatever the reason might be, you need to be smart in the way you apply for a personal loan to get the best offer.

  • Before making a new purchase, what you often do without fail is shop around wherever possible to know the best deals and products, and then choose from the most affordable or appropriate one. The same applies for personal loans. Once you decide to get a loan, the first thing you should do is look at all the offers regarding personal loans. Check the different terms and options for payment. Make sure to read all the fine print. Get to know the service charges and other fees. When you have all this information from different sources such as banks and credit unions, then you can compare each parameter of each lender. This way you can choose the lender who is most suitable for your financial need and situation. One important thing to look for when comparing different lenders is the rate of interest offered and the duration of the loan.


  • Your credit score is one important thing which will be of immense help when you approach any lender for any kind of loan. The same applies for personal loan also. Your credit score is a reflection of your borrowing history and reveals a lot of information to your lender regarding your payment behavior. If you are a regular defaulter of payments on your debts, then chances are high that your loan application may not get approved. Even if it does get approved, you might be offered a high rate of interest. Lenders are also keen on you having a good credit score which is an indication of your ability to pay them back what they lend to you.

  • The rate of interest offered by lending organizations is not absolute. What they print in newspaper adverts or flyers is not the best they can do. When you visit them in person and make inquiries, you can always set up a bargain for yourself.

  • Work out the entire cost of the loan before committing to anything. Things appear different on paper until you have worked out all the final details yourself. That is when you get to know the true cost of the loan. Compare this parameter on all the offers you get. The total cost of the loan may include opening charges, fees, service charges, interest on the entire loan and closing charges.

  • The term of the loan is also important. A low interest rate but for a longer term may prove to be more expensive than a loan of higher interest rate.

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