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FIVE THINGS TO CONSIDER BEFORE ACCEPTING A LOAN
Borrowing money to finance is a good investment, but when you know you can live without something and it’s actually more a desire than a need, its best to stay away form loans. Here are five things to consider when taking out a loan:
1. Interest Rates
Do you ever wonder what the actual difference between certain interest rates are? Well, you should. The difference between two interest rates could mean thousands of rand for you. Money you could have been putting to better use!
2. Loan Term
If had the choice of a shorter repayment period against the longer term. The longer repayment option may be very attractive and have a lower monthly payment but at the end of the day you are paying more money that you have to. If you can manage a couple of hundred Rands on top of the payment of the longer term then definitely go for a shorter loan term. You won’t regret it.
3. Early Settlements
One thing you cannot avoid and that’s reading the fine print of all contracts. Before you sign agree to anything make sure there are penalties for paying off the loan earlier than you have determined. You might be shocked at what you find.
4. Type of loan
Before you take out your loan, consider your options. There are pros and cons to different loan options and you should shop around before you make your decision.
5. Your Credit Score
You might be thinking what does this have to do with the price of petrol? Well, everything. The only reason why anyone would grant you a loan is because you have proved to be a reliable client. And how do they know this? The credit Bureau has a record of how you have settled your accounts with various retailers and financial institutions. All lending institutions make use of your credit score to determine if you are eligible to obtain a loan.