To Do List
To Do List When Applying for Personal Loans
Nowadays, getting personal loans is relatively easy. An Internet search engine can turn out over one hundred lending companies, each one promising to give the potential borrower the best deal. If you are like any other person, you have also considered getting personal loans. After all, who does not need a little financial assistance? However, before filling up that loan application form, consider the following items to learn how getting personal loans will work best for you.
1. Gather pertinent personal financial information and documentation. Before applying for personal loans, it is best to know the financial materials you have on hand since different types of loans have different prerequisites. Reviewing personal financial papers, such as bank statements and certificates of assets, can help determine what type of personal loan you are qualified for or what will best suit you.
The two types of personal loans are the secured and the unsecured personal loans. The secure personal loans require the submission of financial documents with the loan application and the putting up of collateral, which is any object of value, against the loan. If you have any asset which could be used as collateral, you can apply for secured personal loans.
If you have no valuable assets but still need fast cash, your best bet is to apply for unsecured personal loans. However, you should have a high credit rating because while the unsecured personal loans do not ask for collateral or for financial certificates, the lenders may require that the borrower has a good credit history.
2. Do some research on the lending institutions. It is always best to consider all the options before committing to anything. Do not just settle for the first lending company you see. Look around and evaluate different lenders. It is only wise to do background checks on the lending institutions you are interested in.
3. Research on personal loans packages. Find out which package best meets your needs and best meets your capacity to pay. Do not be overwhelmed by the sheer volume of the personal loans packages available. Consider the following factors when choosing a package: the interest rate; the payment scheme; the limitations, if there are any; and the fees required upon application.
Cross-comparison of the different interest rates and payments plans can also help you choose which package is best for you.
4. Decide the loan amount. Bear in mind that the amount you had in mind might not be the same as the amount you will be getting. The lending institutions determine the loan amount depending on several factors such as the loan policies of the company, the annual income of the borrower, and the spending of the borrower for a given period. Your other expenditures must be taken into consideration because these affect your capacity to pay.
5. Find out how the lenders deal with borrowers who do not pay on time. Most borrowers wish to follow the payment scheme stipulated in their personal loans contracts. However, certain circumstances, such as medical emergencies, might not allow them to do so. In these cases of default or non-payment, most lending companies have policies which allow for late payments or extensions but with an added fee or a penalty. Different companies offering personal loans have different ways of dealing with non-payments. Thus, it is best that the borrowers know before-hand these default policies so that they know what options are open to them in case they cannot pay on time.