Life is about having the freedom to do what you enjoy, without having to worry about money all the time, right? Unfortunately, every so often, unplanned expenses hit. Like the small intimate wedding that now includes your entire extended family, or the simple home renovation that gets stalled by wet weather. When these situations arise, a personal loan could be a good short-term option to keep you covered.
Getting a personal loan can be quick and easy, but there are some important aspects to consider.
1. Not all loans are created equal
When borrowing money, the interest rate can vary depending on how much you want to borrow and your credit history.
For example, you're likely to get a better interest rate, and be able to borrow more, if you secure your loan with an asset such as a car. Lenders generally consider a loan to be risk when it can be secured against your asset as collateral.
EXPERT TIP: Look out for the comparison interest rate, not just the headline rate, when you're comparing loans. A comparison rate shows the true cost of a loan, as it includes both the interest rate and the fees and charges relating to a loan in one figure. A loan with a rate of interest, but higher fees, can end up costing more than a loan with a higher rate of interest.
Get a better idea of rates and loans that cater to your needs here.
2. Do the math before you apply
Once you establish how much you want to borrow and the interest rate you may be eligible for, look at your spending habits and get comfortable that you can afford the repayments.
Do all of this before you complete any loan applications.
EXPERT TIP: Use our loan repayment calculator to get an idea of how much your repayments might be for your loan amount (without having to share your private information).
3. Set-up automatic repayments
Woohoo! Once you've been approved, set up an automatic payment reminder or direct debit to cover your repayments.
Woohoo! Once you've been approved, set up an automatic payment reminder or direct debit to cover your repayments.
It's really important to make your repayments in full, on time, all of the time. If you know you'll be late with a repayment, plan ahead and let your lender know. Late payments often incur a penalty fee and could affect your credit score, which may have an impact on your future borrowing ability.
EXPERT TIP: Treat any personal loan as a chance to build a good credit history for yourself. When you need to take out a home loan one day, having a good credit score will help you get approved.
Whether it's booking a trip to New York at Christmas or renovating your summer pad, we can help you get there. Apply for a personal loan today and get the financial freedom you deserve.
These tips were brought to you by The Latitude Betterers, helping you live a Life Done Better.