Need a personal loan? Keep this in mind!

I continue to be very concerned about the levels of debt that prevails in South Africa. However, borrowing is a fact of life and hence I came across some useful advice recently that I am happy to share as we start the New Year.

When it comes to Borrowing  money, a personal loan can be a reliable and sometimes cheaper option to consider. If you’re disciplined at paying back the monthly instalment, a personal loan can be useful to help consolidate debts. A personal loan can also help you tackle home renovations without having to worry about the sometimes expensive interest rates that come with credit card expenses.

However, applying for a personal loan isn’t an easy decision as you have to think about what type of loan you need as well as find a reputable loan provider. Here are a few tips to consider when shopping for a loan.

Shop around

You may think that the interest rate charged on personal loans is the same everywhere. But do your homework and you’ll be surprised at just how much you could end up saving. If shopping for a personal loan is a little daunting, remember that a useful website, Hippo.co.za can help you find affordable personal loans, both secured and unsecured, with affordable interest rates.

Read the small print

Always read the small print on your loan document to ensure that you fully understand what the loan entails. If anything is unclear, be sure to ask questions. You might also find certain benefits correlating to specific terms and conditions, which could help you gain discounts, rebates and special once off charges, etc. Some institutions can also offer you discounted rates depending on for instance whether  you’re an existing client, your risk profile and on the type of account you have, i.e  a silver account, gold account or a platinum account. If you stay on top of your repayments and never miss a payment, you might even be rewarded with a rebate.

Get Loan Protection Insurance

If you’ve applied for a loan, it’s probably a good idea to also consider taking out Credit Protection Insurance. This type of insurance is vital for in case you fall ill or get retrenched, as it will ensure that your loans are paid up to date. For example, you might fall ill and be unable to work for a few months, you needn’t worry about your loan as this insurance will ensure that it’s paid back on time.

Make sure the credit provider is National Credit Regulator (NCR) Compliant

The NCR was created for the explicit purpose of protecting clients against reckless lenders, who are looking to exploit innocent credit seekers. So, before you apply for a loan with any credit provider, it’s important for you to make sure that they are registered with the NCR.

Limit your loans

Applying for various loans from different institutions might seem easy and tempting, but be careful, as this can leave a dent on your credit history. This may just push other financial institutions to run the other way when they  discover that you have been rejected for loans before by other financial institutions.

It’s important to do your homework thoroughly when applying for a loan. The more you know, the less likely it is that you’ll get yourself into impossible commitments. Ask questions if you’re not sure and always opt for a personal loan through a reputable lender.  If you don’t know where to begin looking, Hippo.co.za is there and can help you find quotes from different personal loan providers. Remember to always read the terms and conditions and the fine print.

References

  1. Author Anon. Bridge loans. About Loans. Date Anon. http://www.bridge.co.za/loans/about-bridge-loans/faq/about-loans [accessed: 12/09/2014]
  2. Emma Lunn. The Independent U.K. Ten tips for taking out a personal loan. 10 October 2012http://www.independent.co.uk/money/loans-credit/10-tips-for-taking-out-a-personal-loan-8205679.html     [accessed: 11/09/2014]

Hippo Comparative Services (Pty) Ltd is an authorised financial services provider. FSP number: 16357

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Disclaimer: The information provided in this article is for informational purposes only and do not constitute legal or other professional advice. Hippo Comparative Services (Pty) Ltd does not accept any responsibility for any act, omission, loss, damage or the consequences thereof by the dependence by any person upon the contents of the article.


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