Black Or Red? Don’t Gamble On A Personal Loan

Image credit


Let’s face facts; money isn’t readily available. As an adult in the real world, bills come thick and fast, and you might not have the money to cover the costs. So, you turn to a personal loan in your time of need. There is nothing wrong with an influx of cash to keep your head above water. In the long-term, it might be the difference between staying solvent and going bankrupt. The error comes when you take too much risk. A personal loan isn’t hazard-free, but it should never be a gamble.


This is how to reduce the risk and keep your finances in the black.


Is It Necessary?


It sounds like a silly question to ask, but applying for a personal loan doesn’t have to be the answer. Yes, there are bills to pay and your account is empty, yet there are other alternatives. A family member or a friend, for instance, could be willing to lend the cash. Then, there is no reason to worry about getting into a web of debt and suffocating under the weight of interest payments. Alternatively, you can contact the creditors and ask for relief. They won’t write off the debt, but they might agree to a payment plan.

Image credit


Does It Have To Be Secured?


A secured loan is where a creditor can take assets as collateral if you default. Obviously, it’s the last thing anyone wants to agree to, yet you might have no choice. Still, it doesn’t mean you shouldn’t check out the competition for a better deal. A great place to start is because they are experts in good faith agreements. Or, can help you find the best-unsecured loans and guide you through the process. Whatever you do, don’t assume it’s a good deal because there is no collateral. Always research the company and the loan plan beforehand.


Is There A Grace Period?


Typically, the answer is yes. Credit card companies are pretty good at offering first-time deals with low-interest rates. The way it works is simple. The company gives you a promotion such as 0% of purchases for a year, after which the interest rate rises. Now, like all credit cards, there is an element of risk once the interest rate kicks in again. However, if you can pay the money back before the grace period ends, then it’s a flexible way to borrow. An excellent tip is to include balance transfers as well as purchases.

Image credit


Is It Legit?


Borrowing from a bank is one thing, but lending from a private lender is another. Although trust in banks is at an all-time low, they are regulated. Therefore, they have to follow the rules and are subject to fines and penalties. Private suppliers are different because they follow their own rules. A loan shark is an extreme example, yet payday loans companies can be as destructive. Always consider the legitimacy of the creditor before signing.


A loan can be dangerous, but you have the power to make it safe.

Speak Your Mind