Everyone may need to borrow at some point in their lives for cash flow. In times like that, personal loan is a relatively common and effective way out, it can even help you to achieve smart financial management! How are loans related to credit ratings? Here are 10 tips on getting a personal loan.
1. Shopping around for a personal loan may affect your credit rating.
People tend to apply to multiple financial institutes to find out which one offers the lowest interest rate. This is only half of the picture because Annualised Percentage Rate (APR) differ in each case, mainly depending on the applicant’s credit rating and ability to repay the loan. Do not apply to every financial institute or bank in town simply for comparing different APRs offer so that you can choose the cheapest option. This is because submitting application would mark the borrowing record which may affect your credit rating and the bank’s loan approval decision, ultimately raising your APR, bringing greater losses than gains!
2. How can I choose a suitable personal loan product with all the options out there? Seek for professional advise!
There are different loan products in the market. Do not just pick one out of urgency because another one may suit you better! Some banks have dedicated loan personnel to help you choose the most suitable one. If you don’t know what you need, some banks offer to answer your questions and help you identify the most suitable option. You can simply fill in your contact details on their website and request a call back from a professional loan advisor.
3. It is not that hard to get a loan from banks.
Some say it is easier to borrow from financial institutes than banks. It depends! In fact, banks are a bit stricter in loan approval than lending companies, but for most people, borrowing from banks is not difficult at all. For example, Standard Chartered Personal Instalment Loan only requires applicants to be at least 20 years old with a Hong Kong permanent residency and a fixed annual income of HK$96,000 or more! Being subject to a reasonable threshold in exchange for lower APRs, longer repayment periods, and larger loans than what financial companies offer is actually a good deal! Standard Chartered Bank’s professional loan personnel are attentive to your needs and can help you identify the most suitable loan.
4. Fix your financial problem ASAP. Do not procrastinate!
Financial problems are like diseases. If not treated in time, they will get worse. So, you must not procrastinate, but nip it in the bud! If you avoid to clear the debt and wait too long, the debt will snowball and you will need a bigger loan with a higher APR to fix the problem. So, you should deal with it before it becomes a big issue!
5. Borrow from one instead of several from different institutes.
Not every bank approves your applied loan in full, so some people still need to borrow from different institutes. Apart from dealing with multiple payment deadlines, having too many individual loan records may affect your TU Credit Rating. The best way is to borrow all you need in one go, from a bank that offers bigger loans! There are also some private loan options on the market that offer long repayment periods and bigger loans, suitable for those who need a big loan.
6. Debt consolidation can help you pay off your credit card debt.
It is essential to pay off your credit card bills on time. If you only able to pay the minimum payment each month, the interest will snowball. With several credit cards like that, you will be in a really big trouble! You can apply for a debt consolidation programme to repay your several credit card loans in one go and repay the borrowed loan by monthly instalments. This way, you can save the high interest costs and repay the loan faster!
7. Apply for standby cash as well on top of your debt consolidation plan
When choosing a debt consolidation programme, you can also pay attention to see if the bank offers “Extra stand-by cash”. If you have unexpected cash flow needs, extra stand-by cash can offer you extra cash to deal with that instead of applying for another personal loan. Now, some personal loan programmes offer extra stand-by cash of up to your 14 months’ salary, helping you repay your credit card debt with peace of mind!
8. Don’t need to show up for application, just over the phone!
Some people think that applying for a personal loan is very troublesome as you need to visit the bank many times. In fact, now you can conveniently borrow money on the phone most of the time. Nowadays, some personal loan applications can be made entirely online. You can submit all required documents such as identification and proof of address and income online! There will even be dedicated personnel to follow up throughout the review procedure. You can apply without leaving your home or visiting the bank!
9. Capitalise on the low APR% now for smart financial management
Knowing when to borrow is part of a smart financial management. Personal loan interest rates are relatively low these days. There are less hurdles than before, making it a good time for you to borrow for cash flow issues and meet your various needs like home renovation, a distance-learning degree programme, and a credit card loan repayment. You can even utilise the spare cash to realise your dreams!
10. Seize the opportunity to meet your cash needs by getting a personal loan.
Opportunities do not wait. You need to have enough money to seize them! Personal loans help you overcome cash flow issues. With the low interest rates now, you can consider getting an instalment loan to help you achieve your goals.