3 Important Things to Remember before Asking for a Personal Loan

3 Important Things to Remember before Asking for a Personal Loan

What is a personal loan? Buying a car, doing a home remodeling, or financing studies are some of the main reasons for asking for a personal loan. However, in order to purchase this financial product, it is important to comply with a number of requirements, such as having an employment contract or proving sufficient economic solvency. In addition, taking into account other aspects such as the type of commissions or interest that the bank asks can help to make this financial product not more expensive than expected.


Do not ask for more money than you need

A few years ago, when asking for a loan, it was common for the bank to offer you more than you asked for. This way, if the initial reason to ask was to change the kitchen in your house, you finally ended up remodeling the bathroom, or buying new furniture. At present, the economic crisis has made this trend change, both by banks and customers. The former no longer grant loans so lightly, and the latter borrow only the money they need to cover a particular purpose. Today, the entities do not lend money in an altruistic way. When you apply for a loan you will have to pay back the money you have borrowed, along with interest, commissions, etc., which will make the total amount to be owed considerably higher than the loan. Therefore, when asking for a loan, adjust the maximum amount you want to apply and avoid paying more interest for it.

Please return as soon as possible

When the borrowing entity asks you how long you want to repay it; try to make it as small as possible. You must take into account your income and ensure that it is a fee that you can assume periodically. After that, do calculations and try to adjust the repayment term as much as you can since the longer you take back, the less security the bank will have and the higher the interest applied. In fact, this is one of the factors that make the price of loans more expensive. On the other hand, if you pay installments of a greater amount (in a shorter period of time) you will repay the loan earlier and it will be more economical.

Do not delay payments

When you take out a loan, it is very important that you pay the installments within the term that you have established with the entity, without delaying you a single day. If you comply with the payment later than the contract, the entity may penalize you by applying default interest, which is usually much higher than the ordinary interest. If this situation is repeated, or you stop paying a monthly payment, your debt will not disappear, but will increase and could end up seizing your assets or bank fees. Therefore, before asking for a loan make sure that you can cope with the payment of the same and above all, it complies with the payments in the predicted term!