A personal loan is a type of credit that banks or moneylenders offer to help you meet certain financial demands that you otherwise couldn’t with your existing financial balance.
What makes personal loans appealing to the masses is the fact that it charges a lower interest rate than most commercial credit cards, but applying for a personal loan is quite a tedious process – you would have to have meet certain standards to get approved, which still doesn’t guarantee you get approved or that you get your desired loan amount.
Hence, if you would like to have an easy cash loan process, you ought to do your research on the different agencies so that you can find one that is most suitable to your needs and financial situation. If you’re wondering how to find the right lending agency, here are five questions you should ask before you apply for a personal loan with one.
1. What are the required documents?
This is the most essential question because the proceeding ones won’t be necessary if you don’t have the required paperwork to begin with. The requirements that most loan agencies ask for range from your monthly electric bill all the way to your pay slip from work. This is what they will use to see if you are qualified for a personal loan (or any of their loan offerings) and sometimes determine how much you can loan from them.
Before you start your application process with a loan agency, be sure that you have the required documents so you can proceed accordingly and increase your chances for an instant loan approval.
2. How much time do you have to pay the loaned amount back?
With most loan agencies, the repayment term for a personal loan range from either 1 or 7 years, which you have to pay in monthly increments after 30 days of your loan application approval. Keep in mind that should you opt for a shorter repayment term, the interest charge will decrease in value, just as opting for a longer repayment term will increase it.
Making sure that you are able to meet their repayment term helps with making sure that you will not be paying more for interest charges than your original loaned amount because your interest rate will pile up on top of each other with every missed due date, gradually increasing in value.
3. Are there any fees on top of the loaned amount?
Aside from the given interest charges, you should ask if there are any fees attached with your personal loan. Some banks or moneylenders charge for processing fees, sign-up fees, and so on; while others don’t. It’s important to know the necessary charges that you will get billed with upon applying for a personal loan so you know exactly what you’re getting yourself into.
Finding a moneylender or bank that values transparency with what they will be charging you with is important so that you can avoid getting surprised by hidden charges. One way you can do this is to clarify what you will be paying them for once you apply for a personal loan with them.
4. What does your credit score look like?
If you already have a settled credit record with a lending company, you most probably will get approved right away if you apply for another loan with them. But if you’re applying for a personal loan with another bank or moneylender, it’s best that you have a good credit score.
Credit scoring is a numerical representation that helps your odds of getting your loan application approved. Additionally, you will also have a higher chance of getting a bigger loan amount if you have a good credit score. To maintain this, you should see to it that your credit card bills and other financial dues get diligently settled since any unpaid balances negatively affect your credit score.
5. When do you need the loaned amount?
When you’re applying for a personal loan, it’s probably because you have to urgently meet a financial demand on a specific date.
That’s why it’s important to know whether or not the agency that you are applying for a loan from will be able to disburse the money when you need it, and one sure-fire way you can do it is to ask. You already have a financial demand to attend to, and the last thing that you need are delays.
When you’re applying for a personal loan, you not only have to make sure that you know what you’re getting yourself into, but you also have to see to it that you’re going with a bank or moneylender that will work for your needs.