Maricor Bunal
Getting a personal loan is one of the major financial decisions one can probably make. If done right, this can be a stepping stone in your wealth-building venture, considering that you can use the loan proceeds to start a business or an investment package. However, if done wrong, a loan can get you into debt. So to ensure you’re making an informed choice, ask yourself these questions first:
How much exactly do I need?
Remember, you’re going to repay the amount you need plus the interest rate. So if you’re not careful, the additional monthly expenses will eat up your budget, instead of spending it on other more important things.
What’s your purpose for the loan proceeds?
There are lenders offering low rates to borrowers who’ll use the money for special purposes. For instance, Doctor’s and Medical Equipment Purchase Loans are offered at lower rates than other types. This is because the purpose of the loan benefits other people as much as it benefits the borrower.
Is this a worthy investment?
Whether you’re planning to take a loan for the purchase of a new home or car, you should also ask yourself first if you really need these properties now. Or probably, it’s better to postpone the decision until the auto or real estate market is performing well or if you can find a better loan offer.
Is this the best loan type for my needs?Consult an expert regarding your needs so that they can advise you on the most suitable loan for your need. For instance, it’s best to get an emergency loan instead of the regular cash loan when you happen to live in State of Calamity areas. This loan type comes with lower rates and more flexible terms than other types because it’s partly subsidized by the government.
Are the details on the fine print suitable to my needs?
Make sure to read the fine print of the agreement before signing it. Specifically, you should look into the methods and monthly deadlines of payment, as well as the loan maturity and delay charges. Then, negotiate with the provider and adjust as necessary.
Is the payment option flexible?
It’s important to choose a loan provider offering flexible option to ensure you won’t miss any payments. Fees for delayed payments can eat up your budget. Besides, consecutive missed payments can ruin your credit rating, or worst, get your collateral foreclosed or repossessed.
Is my current cash flow sufficient enough to accommodate my recurring monthly bills plus the loan installments?
This is the most important question to ask and answer as honestly as possible. Before even considering a loan, take time to sit down, look into your monthly cash flow and see if your income is sufficient in paying off the loan on top of the recurring expenses per month.
We, at Loansolutions PH, are committed to guiding the Filipino people make informed financial decisions, especially prior to their loan application. So if you keep these questions and tips in mind, we assure you that you’ll be able to make informed decisions every time you’re about to sign up to any financing solution.
