As we all know, personal loans can be very helpful if we can manage them with discipline. If you find yourself in a situation where you don’t know where the money will come from for your bills etc, then a personal loan can come in handy. However is it important that you know that this financial step should be taken with a lot of care. I would strongly suggest that you determent if a personal loan would be the best solution to your problems. In this article will I give some red flags which you should avoid when optioning for a personal loan, especially if you are planning to lend large sums of money.
The first and most important rule that I can share with you is; is that you should only borrow an amount which you are 100% certain you will be able to pay back. Make sure that your salary is enough to pay the monthly payments of the loan in full and on time. If you fail to make a monthly payment, then it will have long term negative affects on your finances. If you have the slightest feeling that you won’t be able to make the payments on time, then you should strongly consider for other options to solve your problems.
In most cases will you be confronted with loan products which allow you to lend the desired amount of money, but bear in mind that the interests are very high on these easy-quick-loan products. Even though you will be able to get the desired amount of money, is it highly advisable that you avoid these options. The reason for this is simple. The chances are very big that you will not be able to sustain the loan on the long run. It is important that you know that even if you think that you will be able to get of debt faster, the payments will be very steep on these loans. You should think twice about obtaining a loan if you think that your monthly income won’t be able to support the loan.
Another red flag which you should avoid is high interest loans. In most cases you will have to pay back almost double the amount which you have borrowed. These high interest loans are much harder to pay off. I would strongly suggest that you do some shopping online for low interest rate loan. Do not go for the first loan that you see there are many mediums where you can get some quotes, in order to find the best solution for you.
If you have a bad credit score, then it's highly unlikely that you will get a loan. Get your credit score first and see where you can improve.
To conclude. We all know that there are hundreds of loan packages available in South Africa that looks very attractive. We should just all be aware of the red flags. Avoid the above mentioned to ensure