The most basic reason you may need a loan is because you need immediate access to cash. The reasons may vary from individual to individual as well as if you own a business. It’s important to consider a few things however, before you decide that you need a loan.
Here’s what to consider when you need a loan:
Consider if you really need a loan or not. Perhaps the loan is not really needed right now, so instead of taking out a loan you could wait until your next salary comes up, or rather just consider saving.
If you do need a loan, ensure that before you apply you are in a position to be able to afford to make repayments comfortably throughout the repayment period. You’ll need to be able to provide some form of proof of employment and to show that you will be able to afford repayments.
Consider the type of loan you need. The most common loan types are secured and unsecured loans.
If you are taking a loan out for home renovations, keep in mind that this type of loan will essentially bring you some kind of benefit.
Read the fine print. Make sure that there are no hidden charges. Find out about things like early repayment penalty fees.
Remember that not all loans have a fixed rate.
Be realistic about the loan term. Not all lenders will be willing to let you change the term if they think you can pay the whole debt off within half the time.
Remember that you are obligated to repay the loan in full, including interest and monthly fees.
Beware of lower interest rates. While this is a good thing, it also means that repayments will carry on over a long period of time.
Make sure that you approach only registered credit providers who adhere to regulations set out by the National Credit Regulator.
