If you are considering applying for a personal loan, you need to think carefully about the terms and conditions of the product you opt for. You may need the money quickly, to cover something unexpected like a bill or sudden medical expense, but you shouldn’t skim over the details and go for the first loan you find. Shopping around is important – and doesn’t take long.
One of the main points you will consider when you apply for a loan is how long you will repay the loan for. Investinganswers.com says that a loan term refers to a set maturity date and usually has a fixed interest rate. The amount of time you borrow for impacts on how much you will repay overall. It can be difficult to understand the full costs implied when taking out a loan at first glance. You can see APR rates quoted on many loan advertisement, but this might not mean much to you.
What some loan providers are doing is adding a loan calculator onto their website that allows you to see your different options easily, clearly and in plain English! For instance, on the Wonga website, you can see that borrowing a personal loan of R2665 over a period of 17 days would cost you in total R3167.46 which includes all interests and fees. You can use the slider to see how much this would cost you if you extended the loan term to, say, 30 days. You can play around with this until you reach a figure and time period that you are happy with.
Remember, ultimately, the longer you take to repay the loan, the more it will cost you. You need to figure out exactly what you need the money for, and when you would have the funds to repay it. Also, consider other options, like drawing on savings or asking family for help. If you are having trouble understanding your loan repayment options, it is a good idea to call the company directly. Remember only to use reputable loan providers. They will likely check your credit file when you apply for a loan, so it is also wise to get this in tip-top condition before you apply for it. If this isn’t an option, because you are in a rush to obtain finance, try companies that offer finance to people who have poor credit ratings.
Author: Oliver Curtis
Hi there. I’m Oliver. I’m just a young boy from the outskirts of… Okay, that’s a lie, I’m not a young boy anymore, although I certainly feel that way at heart.