Top 7 Questions to Ask Yourself before Getting a Personal Loan

Getting a personal loan is one of the major financial decisions one can probably make. If done

right, this can be a stepping stone in your wealth-building venture, considering that you can use

the loan proceeds to start a business or an investment package. However, if done wrong, a loan

can get you into debt. So to ensure you’re making an informed choice, ask yourself these

questions first:

1. How much exactly do I need?

Remember, you’re going to repay the amount you need plus the interest rate. So if you’re

not careful, the additional monthly expenses will eat up your budget, instead of spending

it on other more important things.

2. What’s your purpose for the loan proceeds?

There are lenders offering low rates to borrowers who’ll use the money for special

purposes. For instance, Doctor’s and Medical Equipment Purchase Loans are offered at

lower rates than other types. This is because the purpose of the loan benefits other people

as much as it benefits the borrower.

3. Is this a worthy investment?

Whether you’re planning to take a loan for the purchase of a new home or car, you should

also ask yourself first if you really need these properties now. Or probably, it’s better to

postpone the decision until the auto or real estate market is performing well or if you can

find a better loan offer.

4. Is this the best loan type for my needs?

Consult an expert regarding your needs so that they can advise you on the most suitable

loan for your need. For instance, it’s best to get an emergency loan instead of the regular

cash loan when you happen to live in State of Calamity areas. This loan type comes with

lower rates and more flexible terms than other types because it’s partly subsidized by the

government.

5. Are the details on the fine print suitable to my needs?

Make sure to read the fine print of the agreement before signing it. Specifically, you

should look into the methods and monthly deadlines of payment, as well as the loan

maturity and delay charges. Then, negotiate with the provider and adjust as necessary.

6. Is the payment option flexible

It’s important to choose a loan provider offering flexible option to ensure you won’t miss

any payments. Fees for delayed payments can eat up your budget. Besides, consecutive

missed payments can ruin your credit rating, or worst, get your collateral foreclosed or

repossessed.

7. Is my current cash flow sufficient enough to accommodate my recurring monthly bills

plus the loan installments?

This is the most important question to ask and answer as honestly as possible. Before

even considering a loan, take time to sit down, look into your monthly cash flow and see

if your income is sufficient in paying off the loan on top of the recurring expenses per

month.

We, at Loansolutions PH, are committed to guiding the Filipino people make informed financial

decisions, especially prior to their loan application. So if you keep these questions and tips in

mind, we assure you that you’ll be able to make informed decisions every time you’re about to

sign up to any financing solution.