Credit of any form has become a need for most of us. During financially turbulent times, the appeal of an instant loan is insurmountable. The prospect of getting easy money when you need it the most is what lures a lot of people into debt traps, bad credit and repayment defaults.
Here is a list of factors you should be cautious of when opting for instant or personal loans:
Hefty Prepayment Charges
Whenever you have spare funds and a loan to repay, the most obvious thing to do is prepay the loan and save on the interest. Sometimes, you might come across lending institutions which charge exorbitant fees in case of personal loan prepayments and foreclosures. Hence, always clarify this aspect with your chosen lender before finalizing the personal loan. Prepayment charges of around 1-3% are permissible.
Irrespective of your past credit history and score, processing fees is something you cannot escape. Make sure to get a good deal with the lender so as to avoid being overcharged
The Fine Print
Most of us skip the fine print, thinking that the terms and conditions are unimportant. When availing a personal loan, always read the terms and conditions thoroughly to avoid unpleasant situations.
Considering a Single Lender
To get the best personal loan scheme with the lowest interest rate, it is important that you look beyond your regular bank. You might find a better scheme with a new lender.
Aman Khanna is an experienced financial advisor who is well known for his ability to foretell the market trends as well as for his financial astuteness. He has an MBA in finance from Toronto University as well as years of experience delivering seminars on sound financial practices and debt management.