In daily financial life, nobody knows when you need to borrow money to pay certain items as your current cash level just may not cover it. This can be financing your large item like any medical emergency or paying off any credit card debt. it’s a situation , you should make a loan and also many financial institutions are there to provide it. So it can be an unsecured personal loan.
Interest Rate
You shouldn’t take any personal loan just because you got it. Some good personal loans are below 10% and some are three to four times of it. This interest rate also depends on credit score.
Other points also need to know the Annual Percentage Rate, which can be manipulated. So you need to know about the total amount you need to pay on the loan, including interest, principal and it’s better that you know about the loan’s ultimate cost.
Not Having A Proper Budget And Plan
Taking a personal loan is that you need to pay your EMI on a monthly basis.
You need to set some of you expenses plan
You should know what your Debt-to-income Ratio is. This is your total debt including all mortgage, car loan, credit card bill, car payment to your income.
- You should know about your essential expenses: car payment, groceries, rent etc. and non essential expenses : eating out, holidaying out, ordering deliveries etc. You should focus on reducing your non essential expenses.
Applying other loans and Credit cards same time
If you are looking for a personal loan then it may be beneficial for you not to apply for another loan or a credit card at a time, otherwise it may affect your credit score negatively or it might be difficult qualifying for the loan.
Payday Loans
It’s a kind of short term personal loan, that financial experts advice consumers to avoid. The interest rates are very high and the term often people rolling over the loan into additional terms.
Insurance Pitch
When you are taking a personal loan, you should take insurance coverage of the loan. As life is unexpected and to repay it is easier if you take insurance coverage. Here the insurance premium is less, so you can call the below contact of PLENTYSURE team for helping you in insurance coverage.
Privacy Concerns
Normally Banks and Credit unions provide loans with good privacy rules. But some private institutions may be less formal. Although all should follow the privacy policy.
Not Knowing hidden Cost
When you borrow money through a personal loan , there is a cost involved.Personal loan may come with many fees or hidden costs.
- Late fees
- Origination Fees
- Application Fees
If you are seeking a loan for your wants rather than need, then you should focus on savings to purchase. Before taking a personal loan, you need to be sure to know the risk involved.
Hope it’s good information on personal loans, which will definitely help you in borrowing decisions. For any kind of more assistance on Insurance coverage just connect to our expert team PLENTYSURE (www.plentysure.com). And for Retirement Planning / Financial Planning, contact our world class CFP professional services. (www.moneygrainsexports.com)
One question for you: If you had taken any loan in the past, what are your experiences ?
Team PLENTYSURE
Thank You,
Jyoti Prakash Nayak, B.Sc MBA BA CFP
CERTIFIED FINANCIAL PLANNER & FINANCIAL WRITER
E: moneygrains.invest@gmail.com / WhatsApp: +91 8792238909
www.moneygrainsexports.com
