Here's what you need to know before you commit to a personal loan.
There are many reasons why we acquire personal loans. Whether it’s making a down payment for a home, funding an education or a new business venture, cash advance loans can be of great help if utilised under the right circumstances.
But most of us (more often the young adults) are clueless on where to start when it comes to applying for these loans.
So, we’ve listed 5 trusty tips for you to take note of before you sign on the dotted line.
1. Always Ask Around
The best way to get ahead of the game is to talk to people. Before you start borrowing, ask your close circle of family and friends to share their experiences with you. Make it a point to speak to bank representatives that offer these loans to get a clearer picture. They are always ready to answer all your questions.
Otherwise, you could turn to the World Wide Web for answers. Read reviews on reliable financial portals, blogs, and websites to get a comprehensive understanding on cash advance loans. If you still need help, seek advice from financial advisors. They will assist you through the decision-making process before you commit to a loan.
2. Know Your Limits
Find out how much you can afford to add on to your financial responsibilities in order to meet your loan repayments at the end of every month. Take into account factors such as your monthly allowance & income flow, current age, retirement age, personal investments, household size, home mortage, etc. Here’s a rule of thumb: Your total loan repayments should not exceed 60% of your net salary.
Tip: Use the GoBear loan calculator to estimate how much your monthly loan repayments would sum up to.
3. Keep Track of Your Credit History
Some of us have stellar credit scores while others don’t quite make the cut. Regardless, it is always good to do a quick check to make sure your credit report looks great for banks and other lenders to review it. If it needs improvement, re-evaluate your lifestyle by making a few adjustments (i.e: spending habits) in order to strengthen your credit report. Tie up loose ends and work on lowering your debt-to-income ratio by at least 6 months before you submit your loan application.
4. Preparation Is Key
It is best to know what are the documents required by banks and lenders ahead of time. In order to secure a loan, you will need to prove that you are able to meet your loan repayments. These requirements, however, vary from bank to bank depending on the amount you intend to borrow, the type of loan and eligibility. Getting your documents prepared in advance may avoid delays, roadblocks, or worst, rejection.
Here are some of the documents you’ll typically need to prepare beforehand:
5. Compare Before You Commit
Two words: shop around. Weigh out the available options to get the best deal. Keep an eye out on banks that offer these cash advance loans with your requirements. Never settle for the first one that comes your way. Do your research. Compare annual interest rates, rate types, loan approval times, processing fees and charges before you agree to anything. And always be sure to read the fine print.
Let GoBear help you make side-by-side comparisons to give you a comprehensive overview of personal loans that are available across the Malaysian market.
It’s fast, FREE, and easy-to-use. Visit now!