Are You Committing These Mistakes When Taking Personal Loans?
Many people in Singapore take out cash loans for different reasons. Without knowing borrowers make mistakes that could end up costing them time and money. However, some mistakes are rather easy to avoid.
Keep reading for your understand and knowledge in each one, that way you will not end up with regrets like many others.
Not Knowing Your Credit Score
It is your right to check your credit records because having your loan approved is greatly dependent on it. Always ensure that your credit record is correct. Your moneylenders are always the ones who update your credit record. Therefore make sure that they include all those times when you have made prompt repayments.
The credit rating always reflects your credit history. There are lots of ways through which you can maintain it in good standing like paying your debts promptly, avoiding taking on too many loans, and not failing to repay your loans. Having a good credit rating means that you might have your loan applications getting easily approved and at times getting lower rates of interest.
Avoidable Over Extending
Some money lenders do talk their borrowers into overextending their loans. When you don’t require it, don’t get tempted to do that. When you do this you will only end up making your credit rating looking bad and in the end, you will be paying a lot more cash than you will have borrowed.
Taking Up The First Offer
It is always recommended that you take your time to carry out some research and be sure to shop around too. Since it’s you who requires the money, it is advisable that you shop around to help you avoid those individuals who may take advantage of your financial needs. You could consider taking out personal loans from banks but it may take a lot longer. This is because banks normally require lots of paperwork. You could also try working with a private moneylender who will offer you more options with interest, terms, and repayments.
The money lending business is quite a competitive industry. You will certainly find a suitable personal loan that can fit your financial needs and your ability to repay.
Not Working With Accredited Money Lending Company
There are many lending companies to be found on the web. Therefore, you need to consider choosing a certified money lender in Singapore. Also be sure to check the time period the company has been operating. A tenured lending company means it’s a company that offers quality services sufficient to keep them operating their business.
Browsing The Conditions And Terms
Make sure that you carefully read the conditions and understand the fine print in them. Of importance is that you don’t rush. Study the terms and take note of some specifics that could cause you to lose money as well as end up having a bad credit record.
Skimming the Fine Prints
You need to recognize that there are some terms that will add extra costs if you aren’t cautious. Thus avoid things like the prepayment penalties as well as late payment penalties.
Not Confirming The Additional Cost
As far as personal loans are concerned, always make certain that you include the extra fees as well as the closing costs to your total price of the amount that you have to pay. Consider the loan terms carefully and be sure to ask your moneylender for clarification when some parts are not understood.
When taking out a loan from a legal moneylender, don’t let yourself be carried away by emotions and think things through carefully. Don’t get overly excited. Always go for the loan that’s suitable for your needs and financial standing. It may not be a good idea to take out a loan to help out a friend or even a relative.
You need to be realistic. Although your income may be steady, it’s easy for you to think that you will easily repay your debt. Always keep in mind that you still have a lot of bills and other expenses, and personal needs to deal with. Therefore, be sure to budget your money well and promptly pay the loans.
Giving Wrong Information
Do not lie about your credit score and income. Your moneylender has the means to confirm this info. When caught, you will be in big trouble by paying huge penalties and also losing your loan.
Not Asking Questions
It’s ok to ask your lender for clarification about terms that are unclear. Ask away, this could save you money and time. Be sure to let them know of your personal case as they are able to give you the right loan suitable for the needs. Every borrower has a different need; hence when there is an issue it’s better to tell your lender about it. Don’t be afraid whenever they try contacting you, they simply want to assist you in repaying the loan as per the terms you agreed on.
Most people don’t negotiate with set terms and simply accept what is presented to them by lenders. Generally, borrowers may negotiate the terms to help avoid their getting into a financial constraint. Getting a loan should assist you in meeting your financial needs and instead not increase your debts.
Borrowing Too Much
Ensure that you take out a loan that you can repay. When you aren’t able to repay the loan, you could end up defaulting. Once you default, the interests will increase dramatically, and you could lose your assets. Additionally, your bank accounts may be seized and even get closed.
People take out loans for different reasons. They could single moms stuck in their budget and would like to repay their debt, go on vacation, buy a gadget or settle a medical bill, even then all this requires some extra cash. It’s tempting to have lots of money, but don’t take out a loan when you do not actually need it. Keenly follow through with your repayment plans and do not hide from your moneylender. Remember that loans are meant to help you, so do not use them excessively.