When applying for a loan, it is important to make sure that you do so for the right reasons. Because you are not paying back just the money you have borrowed, but also the interest. And interest is usually high. Below are a few tips to avoid when applying for a loan:
Do not borrow more than you need
At the time of applying for a personal loan, it may not seem a big deal to borrow slightly more than you need so that you can buy or reward yourself personally for taking out a loan. But the fact of the matter is that the extra cash you borrow will also have to be paid back and with interest.
Keep the tenure as short as possible
This is a simple rule which should be followed. If you take a cash loan, remember that the amount of interest payable on the principle sum is calculated on the lending time. So, the longer the loan tenure, the more interest you will have to pay for!
Take out insurance for high value loans
Sometimes, what worse than dying is leaving loans and liability for your loved ones to pay for once your gone. So if you plan on applying for a high value loan, it may be a good idea to take out an insurance premium which covers your loan amount in case of an unfortunate accident. Being smart and proactive has its benefits.
Make sure you pay your installments on time
Financial institutions make a lot of money by hidden charges. One such charge (which is not exactly hidden) is by delayed installment payments. It’s the same with credit cards. If you are going to borrow money, make sure you do so responsibly and on time installment payments are mandatory and will save you money.
Keep shopping for better rates
The beauty of online financial assistance providers (like Cashwagon), you can keep shopping for the best or the most affordable rates based on your budget. You do not have to take anyone’s word as gospel. Search and find out for yourself.