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Tips on Choosing the Right Personal Loan

September 4th, 2013 by in General with 213 Views

A time comes when the need arise to get our hands on some extra cash- be it the need to extend your house to accommodate a new arrival, take advantage of a business opportunity or to deal with an unexpected emergency, personal loans help us achieve such needs. When seeking a personal loan, make sure to get the personal loan that is right for you to avoid problems in the future.

The golden rule for personal loans is you should take a loan with an amount you can manage to repay and arrange to pay it off as quickly as possible. Try to cut down your personal loan borrowings to an amount you absolutely need. You can supplement your personal loan with more flexible borrowing on credit cards or an overdraft. You can take a bigger loan over a longer period of time to keep monthly payments down, but amount of interest paid back over this period of time will be far more than if you were to borrow the same amount over a shorter period of time.

Avoid sending off multiple applications

It helps to do your research to identify your loan of choice before you apply instead of haphazardly sending off loan applications in the hope that you will be accepted by one of the lenders. Each personal loan application triggers a search of your credit report, therefore making lots of applications at the same time gives a bad first impression to lenders that you are scraping around for money, or even planning a fraud. This will make them less likely to approve your loan application.

Consider your credit score

You are in a better position to secure the right loan if you know where your credit score stands. Know about your credit reports and scores before you start embarking on securing a personal loan. Remember, each application can trigger an inquiry into your credit score, therefore avoid the rush approach with your application, instead find the loan you believe is the best fit for you and apply it before you try somewhere else.

Be aware of scammers

There are claims from many consumers that they applied for “quick cash” personal loans online only to discover they had been tricked, that they had been involved in a scam. Some consumers are tricked into paying upfront fees to get loans that never materialize, while for others, their personal information is stolen from them.

Check the legitimacy of the website and the company offering the loan

Before you apply for a personal loan online, check the legitimacy of the website and company offering the loan. You can search online to find if complaints about the company exist, and check with Better Business Bureau. Many scammers change their names online to avoid detection. Be wary of companies that promise you loan regardless of your credit. Legitimate lenders take your credit history into account. When submitting information of your application online, make sure you are submitting it over a secure channel by looking for a lock sign in your browser and third-party verification services like VeriSign.

  • MD Golam Rabbani

    I want to start a new business. For this reason I need some personal loan. This article has helped me to choose the proper way to take personal loan. Actually previously I didn’t know details about personal loan.

  • Sakil Hossen

    Great!! Personal loan is a very complicated subject and those who wanted to take such loan needed to educate about such subject perfectly. I think this post will help many people for their purpose.