5 Things to Pay Attention to When Getting a Personal Loan
Last Updated on February 16, 2023 by hassan abbas
Financial needs can crop up anytime in life. And a personal loan can help fulfil many needs that arise. Debt consolidation? Wedding? Or Home renovations? There are many reasons to apply for a personal loan with bad credit.
Personal loans are relatively easy to get and offer more flexibility. That’s why nearly 40% of the adult Australian population got a personal loan in 2019. So, you’re not alone.
However, some key aspects should be considered before jumping on the bandwagon. Let’s take a look.
The Eligibility Criteria
All the lenders have some eligibility criteria for issuing a personal loan. It is the first and foremost step before going for a personal loan. In most cases, the eligibility criteria include:
- You are above or 18 years of age
- You are a citizen or a permanent resident of Australia
- You have a regular income source
- You can offer available information about your financial status
Once you decide on the lender of your choice, check the fine print to ensure you meet the eligibility criteria.
Loan Interest Rates
The lender charges you a specific amount in addition to the actual loan amount. It is the interest you pay with the loaned amount. You may want to pay the lowest interest rates on your loan. Who doesn’t?
Shop for different loan solutions that offer sensible and low-interest rates to keep the burden of repayment low. Also, pay attention to the type of interest rate – whether it is fixed or variable.
Planning to Pay the Loan
Planning to repay the loan will give you a better idea of your current and future finances. Once you know your financial standing, you can formulate a repayment strategy. It’s wise to avoid taking loans more than you can pay later.
You will want to ensure that whatever loan amount to choose it’s under your budget. Find a lender who can walk you through the repayment options and schedule. However, it’s advisable to research and use the personal loan repayment calculator to know the actual future liability.
The Loan Term and Fees
Your monthly payment depends on the duration of your loan’s repayment period—more extended periods lower the monthly payments. But the problem with it is the increased interest in the long run. Choose the repayment period carefully to keep the interest rates low.
An average personal loan term ranges from one to seven years. Apart from the period, the personal loan fee is another aspect you need to consider. Some lenders charge more servicing, lending, and early exit fees than others. Ensure to ask the lender about these fees to avoid paying unexpected charges.
The quality of service comes down to how a company deals with its customers. Go for a company that treats you special. If the company keeps customer experience on its priority list, it makes the process more convenient.
In addition, you may also want to choose a lender that facilitates online payment and loan management services. Also, check for customer reviews from other people to ensure the credibility of the lender.
Getting Personal Loan
Personal loans are a great way to make your dream come true. There are so many ways to get a personal loan with bad credit. Now that you know more about getting a personal loan, getting one won’t be difficult.
Consider all the above things before deciding to go for the loan. And in no time, you will start relishing its benefits.