5 Things to Consider before getting a Personal Loan

There are numerous things that you will want to consider when it comes to getting a personal loan. The information in this article will help you to get the loan you need without any negative consequences later. A lot of people rush into getting a personal loan, and it’s a mistake that they usually end up regretting. Whether you are getting a loan for £200 or £2000, it is equally crucial that you take the following things into consideration before even applying for a loan.

1. Interest Rates are expected to go up

Those who are thinking about taking out a personal loan in 2017 will want to keep in mind that interest rates are expected to go up. It is important that you take this into consideration before deciding whether or not to apply for a loan. While you might not be able to predict what kind of interest you will be paying (especially for a variable interest loan), it is still important to remember this.

2. Online Lenders often have the best deals

Online lenders often have the very best deals when it comes to personal loans, so you will need to remember this as well. If you are interested in getting one of these loans, you will need to make a point of looking around online before deciding which lenders you want to apply with. The internet is one of the very best resources you have when it comes to getting a great deal on a personal loan. This isn’t to say that you shouldn’t consider turning to your bank for your loan needs, but you will also want to go online as well.

3. Your Credit will Affect your Eligibility

Your credit score will have a big impact on just how eligible you are for the loan you want, so you will need to take that into consideration. Those who have good credit usually have an easier time getting approved for a loan, but just because you have bad credit doesn’t mean that it’s not a possibility. There are plenty of people with bad credit who get personal loans, but you should still make a point of looking at your credit report before applying. You’ll want to make sure that there aren’t any items on your credit report that aren’t supposed to be there.

4. Personal Loan Scams Exist

A lot of people don’t realize that personal loan scams are all too real, and unfortunately they have become fairly common these days. The last thing you want is to fall victim to one of these scams, so it is important that you are aware of them and what they are like. Many of these scammers will try to get you to put a deposit as a guarantee against the loan. If you find a lender who isn’t very concerned about checking your credit or tells you that they can give you a loan without any paper work, it is most likely a scam.

5. Failing to read the Fine Print could have serious consequences

Not reading the fine print in a personal loan agreement is a huge mistake, and it has cost a lot of people in many different ways. Make sure that you take the time to carefully read through the physical loan agreement so that you know exactly what it says. The contract that you sign with the lender will state how much the loan is for, when it needs to be paid back, any potential penalty fees, and much more. By thoroughly reading through this agreement, you will be able to potentially avoid a lot of problems later on.

Getting a personal loan can be a great way to get something important that you need but don’t have the cash for, but it’s still very important that you approach getting one very carefully. Each year people who get personal loans make a lot of mistakes that end up costing them, and it’s important that you do not do the same. The more time you take to do this research, the better protected you will be when it comes to getting this sort of a loan in the future.

Credit Cards

Should you use a Credit Card Abroad?

Spending money abroad can be tricky and it is good to research all of the available options before you decide which to do. Traveller’s cheques and cash used to be the norm, but these days many more places accept credit cards and it can be a convenient option. However there are some disadvantages to using a card abroad and there are people that avoid using them. It is important to understand some of the advantages and disadvantages to work out whether it is the right option for you.

Credit card companies different in their terms and conditions and so they charge differently. Some will charge a lot of money if you use them abroad, particularly if you draw out cash at an ATM and so it is worth finding out. You may be able to pay some money onto the card and use this to save money, but a prepaid card designed specifically for using abroad may be a better option if you want something that you can do this with.

It is worth finding out whether the shops in the area that you are staying will accept your credit card if you can. You may need a back up plan if they do not, perhaps taking some cash as well. It is usually wise to have cash to pay for taxis and things like this anyway.

Find out from your credit card company what fees they will charge and then compare it with other cards. You may find that there is a cheaper card that you could apply for that would be a lot better for you to use. Consider whether you are prepared to pay any of these fees or whether you would rather use an alternative. Also check whether the fees are the same for purchasing items as cash withdrawals. Cash withdrawals can often be a lot more expensive and it is worth knowing this. You may decide to take some cash with you, after exchanging it in the UK to save money.

It is also worth setting up a direct debit to pay off the full balance of your card before you go on holiday. If you are away when the bill comes and do not get a chance to pay it, you will be charged interest as well, on top of any charges you have had as a result of using your card abroad. Therefore make sure that you pay off the full balance so that you do not have to pay this. Obviously you will need to make sure that you have the means to pay this. It could make a really big difference though as it is easy for interest to quickly accumulate on a credit card with you just paying off the minimum. You could end up paying a lot more for the things that you have bought on the card this way.

A credit card has security advantages over cash too which make it good for spending abroad. If it is stolen then you can report it, get it frozen and you will not lose anything. However if cash is stolen it is almost impossible to trace and you will not get it back. You may also get some comeback if the goods that you buy with the card turn out to be problematic in some way, but this will depend on your credit card company. You may therefore feel more secure carrying a card rather than cash.

So whether you choose to use a card will depend on a few things. It can be costly but it is more secure than cash and so you may prefer it. A pre paid card is likely to be the cheapest option but you will need to be sure that it is accepted in the places that you will be shopping as you would with your credit card. It is really important though, if you are planning on using your credit card abroad, that you tell your card issuer. They track your payments and if they suddenly see payments form abroad when this is something you do not normally do they may suspend the card for security purposes as they suspect it has been stolen. Therefore let them know that you are going and do not forget to arrange that direct debit while you are doing it!


What Should you Borrow Money to Pay For?

Loans can be a way that you can have more things than you could normally afford. However, loans do need to be paid back and they cost money as you get charge for the borrowing. This means that whatever you borrow money to pay for will cost more. This means that sometimes it is just best not to borrow any money. However, in some cases it can be wise to borrow. The decision is not always an easy one, but there are things that you can consider to make it easier.

It is wise to consider what you will immediately get from the money that you have borrowed and the long term gain that you will get from it. If you are considering a mortgage you will gain a home, an investment and rent free living so this could have a very big impact on your life and should have a positive effect on your finances. However, if you are borrowing money to pay for a holiday, home improvements or luxury items then the impact may not be so life changing. It can be difficult to weigh up different lending decisions and it can be a very personal thing.

It is good to start by thinking about how much money you have saved up that you could spend and how much you can afford in repayments. Then you will be able to work out how much you need to and can afford to borrow. This will give you an idea as to whether you can cope with having a loan, before you decide on whether what you are buying is worth getting a loan for.

It is also a really good exercise to find out how much you will have to repay really carefully. Look at your current household finances, how much income you have and how much you spend and whether you will be able to afford the repayments. It is important to think about times of the year when you may have extra expenses and whether you will still be able to manage. Also consider what might happen if the cost of the loan goes up due to interest rates rising and how you will manage if that happens. Only if you are confident that you can afford a loan; should you consider getting one.

Different people have different ideas on when you should borrow money. Some label good and bad debt, with good debt being that which will help you to earn more money in the future such as a mortgage, student loan or car loan so that you can drive to a job. However, others feel that a good debt is one where you have considered all of the options, done lots of research and have made sure that you can afford the repayments. It is wise to fulfil both of these categories really when getting a loan.

Some people use a loan in an emergency. They may have a forgotten bill to pay, have run out of money for food or are under threat of being cut off if they do not make a payment. However, choosing a loan when you are in a panic and worried about how you are going to manage is not a good thing. If you are emotional it is harder to think logically and make the right decision. Therefore it is wise to discuss your problem with someone before you do anything drastic. Speak to a friend or family member or contact a debt counsellor to get help with your problem.

Borrowing money is far too easy to do. It is easy to make a quick decision and get a loan and then regret it in the future because it is so expensive. There are some loans, the ones that are carefully considered, compared cost wise and will help you to improve your life and gain financially in the future which can be worth getting. It is still worth being very cautious as there are many possible problems associated with loans that you need to consider such as the cost, consequences of not paying and managing your money when you have repayments to make. Choosing the ‘right’ specific things to use a loan to purchase is difficult as it depends on personal circumstances but all borrowing decisions should be well researched.