Is a personal loan right for you?
When you are wanting to borrow money or take out a loan, you should think carefully about it and make sure that you are making the best decision for you. Understanding the commitment which comes with a loan is essential. You shouldn’t apply for a loan until you have read all of the information necessary. Therefore, you’ll definitely know how they work.
Personal Loans can be used on whatever, hence the name. But that doesn’t necessarily mean we should use them on whatever we want. They should be used for the most important things like emergencies or home repairs instead of things like the newest phone. Before borrowing a loan, you need to consider if a personal loan is the best option for what you are wanting to use it for, or whether saving up is better. We would advise that you only apply for a loan if it is completely necessary and saving up isn’t an option.
Pros and Cons of a Personal Loan:
Pros
- Quick and Flexible: Usually you will receive your within a day or so after applying for it (if accepted). Although, it could even be a matter of hours depending on the time of your application and which lender. This is the best way to get a loan as bank loans can often take weeks to process. That isn’t the best if you’re borrowing for an emergency.
- Easy and Convenient: The application process for certain lenders and brokers may vary, but they are usually very quick, easy and convenient. Due to advances in modern technology, the application processes are mostly online. Meaning that they can be accessed by most devices like phones and laptops from the comfort of your own home.
- Available for any purpose: Personal loans can be used on anything from holidays to weddings to home DIY.
Cons
- Fixed monthly payments: This could be seen as a pro and a con. Fixed monthly payments can be good because it allows people to pay back their loan in smaller amounts. Along with this, with some lenders, you’re able to repay over the course of up to 6 years. Although depending on the amount borrowed, some people might struggle with monthly repayment and be charged a late repayment fee, putting them in a difficult money situation.
- Potential Scams: Due to the growth of companies and the internet, there are multiple scams out there. But they can be avoided if you know what to look out for.
Can you afford it?
Before applying for a loan you should look into whether or not you can afford it. Although, all lenders will take into consideration if you can or cannot afford the loan after you have submitted your application. This will help them come to the correct decision.
How brokers can help with a loan:
Borrowing from the best lender possible is always one of the top things to consider. You should do your research, whether that be on TrustPilot, or even on the FCA website to make sure your lender is a legitimate lender. You might think a lender is a good idea, but it depends on how good your credit report is. Unfortunately, it is hard to tell which lender will accept you and which won’t, so you might have to apply to multiple lenders. Although, we all know that this will take plenty of time. So, a broker is probably the perfect resolution for you. Broker’s are able to send your application to multiple lenders. This will increase your chances of being accepted, yet you will have only completed one application form.
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