When it comes to financial matters — especially where borrowing is concerned — we all learn to read between the lines through experience. But we can also learn from the mistakes of others. Here we enumerate some common mistakes borrowers make when getting quick personal loans. Read them carefully so you don’t repeat the same mistakes.
Not Taking Stock Of Your Financial Standing
Before diving into any sort of major financial transaction, it’s wise to assess your financial situation. This is especially true when applying for quick personal loans to help you tide over periods of money crunch. Sometimes, people can get overwhelmed by the emotional stress that comes with money management and end up borrowing a loan they cannot afford.
Instead, you should take your time figuring out your financial standing, determine how much you can borrow and afford, create a rough repayment plan, and safeguard your credit score. No one wants to ruin their credit score due to bad borrowing patterns. This brings us to our second point.
Not Checking Your Credit Score
Your credit score, as the name suggests, is a numerical representation of your creditworthiness. It’s an important component of your overall financial health because an impressive credit score can fetch you easier loan terms, low interest rates, and faster loan application processing. A good credit score gives the lender the reassurance that you’ll honour your repayment commitments.
But if you don’t check your credit score beforehand, you might be in for a surprise. If your credit score is lower than you anticipated, your terms of credit will reflect that. Remember that you need to prepare yourself even before you borrow quick personal loans.
Applying For A New Loan When The Option Of Top-up Personal Loan Is Available
Why choose a top-up personal loan? The simple answer is to make your life easier. If you get multiple loans, managing your debt can become a time-consuming process. With top up personal loans, you can merge all your debt into one single loan.
This is a good option because debt consolidation is good for your credit score. As we’ve noted earlier, credit score is a critical figure of your financial health. Besides, with a top-up personal loan, you won’t need to furnish reams of documentation and may even attract a better interest rate.
Not Paying Attention To The Terms Of The Agreement
The financially wise will tell you to always read the fine print before signing on the dotted line. This advice extends to the most trivial of documents to the most valuable financial transactions. Your personal loan agreement is no exception.
Under emergencies, when people apply for quick personal loans and get approved, they skip this step. But getting approved is one thing, getting approved on favourable terms is another. Therefore, make sure you read the loan agreement carefully. Pay special attention to the major figures: the principal amount, interest rate, loan term, terms of repayment, additional fees, among other parameters.
If you make sure you’re staying informed throughout your application process, you will be able to get favourable terms and not get caught off guard later on when the time for repayment arrives. This is why it’s recommended to use Finserv MARKETS and choose from a wide variety of Personal Loan products available there. You can get quick personal loans without the hassle of tedious paperwork.