These things always seem to happen at once too! If this has happened to you and you’ve made the decision that you’re going to need to take out a personal loan to get you through, there are some important things that you need to think about before you do, as the world of personal loans can be a scary place ,especially if you’ve not borrowed before!
In this latest blog I’ll take you through some of the most important things to consider when taking out a personal loan (It’s not as bad as you may think)!
The most important thing to consider when taking out a personal loan is: “Do I really need this and if I do, can I afford the repayments?” Even if you’re desperate for the money, it won’t make your situation any better if you can’t meet the repayments, and a lot of the time it’ll just get you further into debt. Personal loans should only be used if you need the money up front and can then make the repayments after.
A common scenario….your washing machine has packed in……you need a new one, but you haven’t got £400 upfront. A personal loan would allow you to borrow the £400 (with interest) and repay at a set weekly or monthly amount. Remember, it’s all about can you afford to make the repayments.
Once you’ve figured out what you need to borrow the next thing is to think about where to borrow it from.
Make sure that anyone you borrow from is registered with the Financial Conduct Authority (FCA) this can be done by simply searching the FCA’s register here –
Once you’ve found out that the company is registered with the FCA you then need to check how much they will charge you for the amount you want to borrow, you’ll also need to see how much and how often the payments will need to be paid. Don’t be afraid to shop around and get the best deal, why pay more for something when you can pay less somewhere else?
It’s not just the normal repayments that you’ll need to consider, remember, life is unpredictable and things change. What you want to know from your potential lender is what happens if things go a bit wrong, how much will you be charged if you miss a payment? You may take out a loan with all the best intentions in the world, but if things in life change, you need to know what will happen and, more importantly how the lender will deal with you if you delay making a payment! There are many lenders out there who won’t charge you anything for a missed or late payment. The Home Collected Credit (Doorstep Loans) are a great example of an industry that doesn’t charge a penny for late or missed payments. It’s just nice to know that if something happens to your finances, things won’t be made worse by your lender.
You may also wish to pay the personal loan back quicker than the lender needs it to be paid back. Just make sure that there’s no charge for this, believe it or not, some lenders will charge you to pay back early!
Don’t forget to find out exactly how the repayments will be made. It’s no good you getting paid monthly then borrowing the money from a company that will only allow you to pay back the money weekly!
Finally, don’t be afraid to speak to someone at the Company you want to use before you take out the personal loan. Any lenders would be more than happy to talk you through the whole process, answering all the questions you have. If you can’t talk to a human before you take the loan out, you probably won’t be able to talk to one half way through which could be difficult if you need to change something.
Keep an eye out for my next blog where I’ll talk you through some of the jargon loan companies use. As always, feel free to leave comments in the section below.