credit Archives | Page 9 of 9

Like a kid in a candy store, consumers have various loans to choose from. From education loan to home loan, we shall look at personal loan through a microscope.

Personal loans are used for family emergencies, home furnishings, or consolidating other debts. These loans are often short-term.

1. APPLICATION PROCESS

You will be asked to complete a loan application that may include: your name, NRIC, date of birth, address, current and previous employers, length of employment, occupation, sources of income, total monthly income, and information about existing credit accounts.

Image Credits: Chris Potter via Flickr, (stockmonkeys.com)

Your credit card report includes your bill-paying history, amount and type of accounts you have, late payments, collection actions, outstanding debt, and so on. This along with your application shall help the bank decide if you are trustworthy and credible enough to pay the personal loan.

2. THE MORE PARTICULAR IT IS, THE CHEAPER IT GETS

When getting loans, be as specific as possible. The reason behind it is that loans that are particular often have lower interest rates. So, do not take up a personal loan to pay for a school debt when you can just apply for an education loan.

Personal loans tend to charge about 6% to 8% interest while Renovation Loan, Education Loans and etc. tend to have interest rates that are as low as 2%. Know what is best for your situation.

3. REVIEW YOUR OPTIONS

You may be tempted to immediately contact your current bank but that may bite you in the back. Personal loans and its interest change outrageously across time.

When there is less people borrowing from the banks (e.g., bad economy), they tend to lower the interest rates or give more lenient payment terms. So, look for a bank that is willing to give you the best offer and the maximum rewards.

4. WHAT HAPPENS WHEN YOU PAY LATE

Before venturing in, you must find out the clause of the payment penalties first. Like credit cards, it is not impossible to get an “interest adjustment” for a late payment.

Frets not…banks understand that certain circumstances such as unemployment or chronic illness can make it difficult to meet the bills. If this happens, contact your creditor, explain your situation and work out a repayment schedule together.

Tertiary Education and Graduate Studies can be too costly especially to people who live by one cost at a time without any savings plan what so ever. On the other hand, just because a bank tells you that you are qualified and approved for an education loan does not mean taking it is a good idea.

Here are 4 Things to Consider Before Applying For An Educational Loan:

1. EDUCATE YOURSELF

Before applying for any education loan, it is tantamount to understand what the student’s course aspects are such as the eligibility criteria and the loans needed to complete the whole course.

Educate yourself about the loan’s dimensions such as repayment, pre-payment fees, and cancellations.

2. SWIM THROUGH THE WHOLE POOL

Study all the possible options by swimming through the whole pool. Some banks offer the best interest rate while others offer the best processing fee. So, to save you money, enquire about all the loan schemes available in the market.

3. KNOW THE TOTAL COST

Be aware of the interest, pre-payment fees, additional processing fees, repayment options, and cancellation fees. It is always better to get rid of the debts as soon as possible but some banks may impose additional charges for pre-closure of the loan. So, ask yourself if is worth it.

Usually loan applicants concentrate only on the principal and interest to reach repayment amount. By doing so, you will have to pay extra charges that the bank authorities have not clarified. This is why it is vital to ask after educating yourself.

4. CHEAPER ALTERNATIVES TO REACH THE GOAL

Explore if there are cheaper ways to reach the same goal. Other universities offer online diploma courses that are cheaper than if you take it up on the university’s premises.

Image Credits: Will Folsom via Flickr

But, if you have done the math and your financial account cannot cover the expenses just yet…fret no more. Be resourceful instead. Volunteer works, internships, and a Polytechnic diploma may help you acquire the necessary skills without going back to undergraduate school.

By obtaining a diploma in the same field you will take in undergraduate school may help you get other subjects exempted. I have a couple of classmates who are exempted for a couple of semesters or even a year just because of the subjects and electives they have taken up in Polytechnic. Hence, it will not only save you time but it will also save you money.

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