Personal loans offer convenience when it comes to financial emergencies. They also help in funding your new business, booking your international trips, and paying for your child’s tuition. In fact, you can use personal loans for almost anything.
While they come in handy for unexpected situations, personal loans shouldn’t be taken advantage of. They are still a form of debt, with interest payments and other fees that you should pay before its due date. But before you apply for a personal loan, here are important things you should consider so you can maximize it.
Banks aren’t the only ones to offer personal loans
Aside from reputable banks in the Philippines, there are also lending institutions that offer personal loans with better packages including attractive interest rates. You have to remember that some lenders might charge higher interests, but a portion of these are waived if customers pay on time for the entire duration of the loan.
There are hidden and additional fees to look out for
These “lowest interest rates” offers come with “hidden charges” that you should watch out for. Costs on the application, early repayment, and delinquencies might overshadow the low-interest rates façade. Before signing anything, make sure that your lender is transparent with the fees that go with your loan application.
Personal loans can be used for anything
Because they are flexible in nature, personal loans can be used for anything. From achieving your dream wedding to getting your first car, applying for a personal loan is the way to go. You can also start your dream business that you have been thinking about for years.
Personal loans have lower interest rates than credit cards
Most personal loans come with an interest rate of 20% per year which is significantly lower than the annual interest rates of credit cards. Credit card companies usually charge an interest rate of 3.5% per month, which can go as high as 42% annually if you don’t pay your bill in full and on time.
You can negotiate a better deal for your personal loan
Yes, it’s possible to convince the bank you’re applying for a personal loan to lower your interest rate. How? It’s as easy as showing your good credit card payment record and proving how you can pay your loan on time with your monthly income.
You can pay your personal loan in advance without pre-termination fee
With personal loans, you have the option to pay your loan in advance and even ask for a lower total payment. There are banks that don’t have any pre-termination fee for advance payments, so you can pay off your personal loan early without any penalty.
Getting a personal loan requires research. Luckily, there’s GoBear that you can use to help you compare personal loans and their requirements and interest rates before you apply.
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