Personal loans are one of the financial services that banks offer that can work to your advantage if you are a responsible spender and a responsible account holder. There are a lot of different things that you need to think about before, during and after taking out a loan from the bank.
Here are 5things that you need to know about personal loans especially if you are a beginner.
- Personal Loans Have Fixed Rates
When you borrow money from banks, there are things that you will have to remember like interest rates and more. In personal loans, there’s a fixed rate on interest that needs to be settled on top of a percentage of the actual borrowed amount. That’s how they earn for lending money to customers. So when you hear that there’s a 3% monthly interest rate, you should expect a bit more for what you’re supposed to pay.
- Fixed Repayment Period
The repayment period of the personal loan is fixed before the approval of your loan. The repayment period is calculated with the interest rate in it. There are some cases where the loaner will get a shorter repayment period but end up with a higher interest or lending rate.
- Structured and Flexible Repayments
Flexible repayments are also a thing when it comes to personal loans. However, there are banks and NBFCs that offer options that makes the tenure flexible. In most cases, this happens when you manage to pay off a large portion of your loan. This is also referred to as prepayment. In case you encounter problems with funding, as long as you are in good standing with the bank, you can definitely iron out a schedule for payments.
- Personal Loans Can Determine your Credit Score
While credit scoring has yet to pick up in the Philippines, the country is definitely getting there. Credit scores are determined by the behavior you do when it comes to paying personal loans and credit card. If you want to have good credit score under your name, then you might want to consider paying and meeting your deadlines on time.
- Scammers are All Around
Because of the nature of personal loans as well as the approval time, there are some borrowers who will try anything or deal with anybody. Banks and financial institutions are always warning people about the dangers of borrowing money from other sources. This could lead to problems down the road so it would still be a good idea to stick with banks when borrowing money. Borrowing from other people won’t improve your credit score too because it is not properly documented and signed by the proper authorities.
If you are looking for a good brand to get a loan, then we at GoBear.com suggest you try Citibank. Apply for a personal loan with Citibank today and enjoy the best rates compared to other banks and financing companies out in the market today. What’s more, you don’t have to wait for a long time with Citibank as their approval time is only 24 hours from the moment you submit the requirements and necessary forms. Still not sure? Visit Gobear.com/ph today and compare the rates personal rates for yourself.
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