Well, first of all, we would never recommend anyone to actually get a loan, but we know that sometimes we find ourselves in a place that we can’t do without it.
Doesn’t matter if you’re using it for education, medical expenses or paying off your debts like credit card ones, you must always remember that you’ll need to pay it back with a interest rate, so rule #1 should be: get all the information you can and organize yourself. Once you analyzed it meticulously, then you should know all the things you cannot do when getting a loan:
NEVER APPLY FOR NEW CREDIT
You know those credit card invitations we receive on our e-mail with “You have been preapproved” on the title? Yeah, we’re including those too. Every time you have your credit pulled, you lose points of your credit score and for one hard inquiry. Besides, it looks real bad, so nah, if possible, don’t do this, ever.
DON’T OVERESTIMATE YOUR INCOME
As a person or as a company, never ever do that. This a common mistake since people think doing it would get them a better amount of money, but HEY!!! You don’t need more money than you can actually pay, right?
DON’T WAIT TO PAY
And this is for all payments you can pay on time, but you just don’t do it. Everytime a bill’s payment is late, you lower you credit score and increase your interest rate on it, not to speak your lender might impose some penalties for late payments and increase your interest rate for the loan too, making it even more expensive for you. It’s just careless and pointless. Organize yourself and pay everything on time, always.
DON’T GET A PPI
Most of personal loans will try to make you get a Payment Protection Insurance, but never agree on that. It usually comes with a 20% extra rate for you to pay, so it increases your debt and make everything even more expensive over time. Companies will also not pay out PPI before you are one month back to work after an absence, and it might also appear on your credit file. So, for us, PPI is a big no, but if you really think you need it, go to an insurance company instead of getting it on your loan provider.
NEVER FORGET TO READ EVERYTHING
This is a quick reminder that you must read everything before signing up for a personal loan. You know the small words? Specially those. You must be awared of all that is included so you can analyze if it’s something that you agree and can afford.
NEVER EVER GET GREEDY
If you know you can have a personal loan as easy as it gets, you might go out of tracks, so we’ll remember that our advice #1 would always be: never get a personal loan. We thought it was important to remember this, but again, if it’s something important, remember that you can’t go over the top and get more money than you can actually pay. It’d get you in some real problems and we know you don’t want it. Don get greedy. Take what you need, if you really need it, and just that.
This would be our most important “Don’ts” when getting a loan, but what about you? Do you have any other good tip for our community? We would be glad to hear!