What to consider when applying for a personal loan

Thursday 26 May 2016, 10:41AM

By NZCU Baywide


When you get a personal loan, there are a number of factors you will need to consider before completing a loan application. Naturally before you search you will have an idea as to how much you want to borrow and know what it is for. But when you borrow money from a bank, credit union or any other financial institution, it is important that you take into consideration the fact you will have to pay it back and what level of payment you will be able to afford. P

People get personal loans for all sorts of reasons. Whether you’re thinking of getting a travel loan, debt consolidation loan or a loan to fix up your house. Making sure you are able to afford the repayments of your loan amount is a critical step. After all, you may be able to meet the payments, but how much of your total pay check is that payment going to be? Most loan providers have a loan calculator you can use to estimate your weekly, fortnightly or monthly repayments on your loan. The next step then is to plan out your payment schedule.

One way of ensuring that you never miss a payment is to ensure your payments sync up with your pay day. If you have multiple bills or debts going out at different times, it might be worth looking into a debt consolidation loan to simplify and restructure your debt into one simple payment. If you work with your financier to schedule your payments to go out on the same day you get paid, it can reduce a bit of the stress since the money will be deducted from your account just as you are paid. Ensuring that your payments are planned can help you meet payment deadlines and pay off your debt quicker, as well as improve your credit score.