8.3 C
New York
Thursday, March 28, 2024

Eliminate All Financial Sickness With Personal Loans: The Cure-all For Bad Credit Records

Must read

[dropcap]2[/dropcap]1st century will go down in history for quite a few things including surmounting credit card debts that is currently defining the American economy. Irrespective of social status, people are likely to have at least one credit card. The current population of US is about 322.76 million and the number of active credit cards used around the country is about 424.35 million. As of end 2016, the debilitating credit card debt in the US is around $730 billion.

In situations like these, most people are opting for personal loans. These are consumer loans sanctioned by banks for paying multiple bills, including credit card bills, medical bills and utility bills. Consumer loans have recently replaced payday loans as the quick fixes for emergency financial situations.

Personal online loans sound like the dream come true for many who are in sticky financial situations. However, just like all kinds of loans there are fine prints on these online loans you should be aware of. Here are a few things you should watch out for, while shopping for secured or unsecured consumer loans this New Year:

Variable interest rates

This sounds like a gambler’s best friend. A variable interest rate, of course, means that you may have to pay interests lower than the market rate at times. But it also leaves room for the imposition of exorbitant rates. It can be the ruin of your credit score and family finance. There is no guarantee of the amount of the final payment with the variable interest rates.

Ensure privacy for your personal information

Many reputed banks and financial organizations are guilty of releasing client information to third-party clients who may want a part of your newly obtained sum. Write down the privacy policies with legal aid before securing the loan amount.

Avoid frequent credit checks

Frequent credit checks can ruin your credit score. If your lenders check your score too frequently (say 4-5 times over a period of 2 months) your credit score can go from bad to worse. Shortlist your options by carefully going through all available company websites before agreeing to multiple credit checks. You should be able to control the credit checks and you should be able to limit it to 3 or fewer in 3 months.

Making your monthly payments

In most cases, personal loan defaulters have to pay quite a high defaulter’s fine for the lapse of regular payments. While signing the loan papers, make sure you understand how the payments are to be made. If they are to be paid online, get a working idea of the payment portals and gateways and their compatibility with your banking services. You need to make sure you don’t become a defaulter simply because you cannot figure out how and where to transfer the amount.

These are the few factors every personal loan applicant needs to watch out for. Applying for personal online loans online is very easy, but the underlying factors that govern the final payment can make all the difference in your credit score.

Stephanie Cobb is a financial advisor who started her own firm to help out housewives and work-from-home mothers with their credit records. Her personal blog for more information on personal online loans and payday loans. 

More articles

- Advertisement -The Fast Track to Earning Income as a Publisher
- Advertisement -The Fast Track to Earning Income as a Publisher
- Advertisement -Top 20 Blogs Lifestyle

Latest article