Personal Loan Finally Approved: Things You Should Not Do

Finally! Your loan has been approved! You can now pay for the remaining balance of your children’s tuition fees, plan a vacation, start a business or renovate a room in your house!

Getting a personal loan is one way to get the cash you need. Just remember that you will still need to pay for the loan eventually. Yes, at a later date. But that date will come. So you should keep within your budget. No sudden expenses. No unplanned shopping or trips. Otherwise, that loan will prove more harmful than handy.

Here are a few things you should not do when you finally have your application for a personal loan approved.

Late Payment

Never miss out on the date of payment. Each late payment can affect your credit score and destroy your reputation with the credit unions and banks. Plus, late payments lead to penalties. If you maintain your good credit standing, with no late payments to mar your payment record, you may be eligible for additional loans.

Of course, this is only good news if you can afford to pay for any more of the loans you plan on applying for. If you are, then just check on the terms that you and your loan agent signed on until you get to the part where it tells you what to do, and what to submit, in order to qualify for multiple loans.

Loan agents are there to remind you and help you make your monthly or semi-annual or annul payments. So expect that questions involving your credibility as a borrower will be asked. Be honest with your answers. You may want to overstate the true state of your finances or sources of income, just to get those loan applications approved. But you defaulting on your personal loan is bad news.

So when you come in and meet your loan agent, with all the calculations and projections ready, if your loan agent approves, then go for it. But if your agent tells you it’s risky and that you may end up with late payments, then listen and adjust.

Never Overextend

This is a big no-no with credit and debit cards. Remember that your approved personal loan is money that you need to set aside for something else. It’s not extra cash. It’s already been alloted for an emergency, for laptop repair costs, for sudden medical bills.

So, if having access to it will test and strain your willpower, tempting you to buy things you don’t need or go for trips that aren’t really part of your budget, or shop like there’s no tomorrow, then one way to keep that cash safe is to limit your access to it.

Pay for the bills as soon as you get the cash. That way, the money will be out of your hands and you no longer have to worry whether you’ll end up spending it on a few shiny long irons or on shoes you don’t need or on that nifty gadget you’ve always had your heart set on but couldn’t imagine buying until now because it costs as much as a human kidney in some parts of the world.

If that doesn’t work, ask a friend—one that you really, really trust—to hold on to the money until it’s time to pay your bills. Of course, this will only work if your friend is someone who won’t easily give in to you at the first moment you try to get your hands on the cash. Choose this friend wisely.

Or, you can create an entirely different plan. Just make sure it works. Not wasting the cash you get from your personal loan is smart. Otherwise, you may just find yourself in debt, with a loan you’ll have no chance to pay for.

About the Author:

This article is prepared by Compare Hero for Finance Career Education. Compare Hero is Malaysia’s leading credit card comparison website. Compare a broad range of financial products, from credit cards to personal loan plans.

How to Get a Small Personal Loan

Getting a small personal loan is not a difficult task. If you visit the websites of various lenders, you will realize that they have various loan offers available for their clients. In earlier days, people used to avoid taking loans as it was considered to be a vicious cycle. No one wanted to take that extra burden on their head. The old concepts have changed now and people are open for new ideas. With the advent of internet life has become much easier. Initially you could not think of applying for a loan without physically visiting the bank or the financial institution and applying for the loan. These days you can even get your online personal loan amount transferred to your bank account by just clicking a few buttons. Technology has made our lives convenient and hassle-free.

If you too wish to take a small personal loan, all you need to do is go online and search for loan providing institutions. There are numerous such lenders who will be listed on your screen. Your job is to select a few of these lenders and personally go through the websites of all of them. A thorough study of their rules and regulations will help you evaluate the difference between the lenders. There are many terms and conditions written in small fonts which generally people ignore and land into trouble later. Try to shortlist the authentic and reputed lenders out of the long list.

Once you have got a final list of lenders ready, you should fill up the online application form and send them an email showing your interest in taking online personal loans. The lenders immediately send you the loan scheme available with them. You need to further evaluate them and finally zero down on a lender who has the best loan scheme for you. A good deal for you would be one which gives you the loan at the lowest interest rate and maximum flexibility in the time of repayment.

After you have applied for the small personal loan, the lending company checks a few basic criteria that you need to fulfill to be eligible for the loan. These criteria are as follows:

  • You should be 18 years of age or more while applying for the loan
  • You should have an active bank account where your loan amount will get transferred
  • You should have a stable job where you have been working for more than two months
  • You must be a US Citizen

If you fulfill these basic criteria, the lender will immediately transfer your loan amount in your bank. Once you receive the loan, the next important thing that you should be careful about is its repayment. Where an online personal loan gives you a support at the time of emergency, at the same time it becomes an area of great concern if it is not repaid on time. A late repayment attracts a huge penalty and you end up paying much more than what you have borrowed. Therefore, these loans, also known as payday loans are supposed to be repaid by your next month’s salary or whenever the repayment is due. The timely repayment of loans also helps in getting a good credit score. If you build your positive credit score it will help you in future to take further loans easily. Therefore, you should always avoid creating a bad credit score in your account as you could be denied a particular loan depending on your credit history.

If you keep in mind the above mentioned points while applying for a small personal loan, it will certainly be a hassle free experience for you.