3 Top important things before taking personal loan.
Taking personal loan means that you are committing to a financial obligation that you will have to meet as and when it falls due. The following are some of the important things you should do before taking personal loan:
1. Check around for different personal loan deals.
Like any other product, loan lenders have different prices for loans. You should take your time to compare the different APR (Annual Percentage Rates) that different banks or other lenders are offering. The APR is a true indicator of the cost of the loan including the interest payable, other applicable charges and even when the loan falls due.
Don’t be satisfied with the word of your bank that it’s offering you preferential rates as a current customer whereas there are other banks offering cheaper loan deals elsewhere.
2. Read the fine prints
Before applying for a personal loan check the fine prints to make sure that you fully qualify. You may find, for example, that a bank qualifies you to a personal loan when you have used their credit card for a particular period. This means you might meet all other requirements and apply for the loan only to find later that the loan is rejected on grounds of failing to meet some specific requirements.
3. Shop around for PPI (Payment protection insurance)
Though most people don’t like to hear the mention of PPI due to bad publications, it a very vital product when taking personal loan. It covers your monthly credit card or loan repayments if you are not in position to meet them due to unemployment or sickness. It is wise to first shop around for the cheapest PPI deals from different insurance providers.
It is usually more expensive to buy PPI policy directly from your bank or any other lender than from an insurance provider. Before committing yourself to any PPI policy, thoroughly go through it to make sure that there are no vital exclusions in it