If you’re in Nigeria, you should know that personal loan is not easy to pay back. I would say any loan, even the payday loans and the online loans. So, when should you go for a personal loan should be a question you need to ask yourself, before heading to the bank?
It does not matter if you’re searching for a bad credit personal loans or you are among those that need cash advance. Bank loans are easy to give out by the bank, especially the unsecured loans because they know they’ll never lose when it comes to making profit for the bank.
Basically, the most advantageous factor of personal loans is that it’s easily available to customers. This is because the banks that issue personal loans in Nigeria doesn’t have many compliances to adhere to. The lender asks no questions and there’s no criteria that have to be met by the borrower.
However, you will find there’s a downside after you would have taken the loan. This is very much unlike the loans taken for education and housing. But that non-public loans have a high interest rate. Thus, almost all of the financial experts advise against taking on those loans.
So, when should you go for a personal loan?
There are a few circumstances that you can simply choose for this type of loan. However, these circumstances can also be termed as rare. These are highlighted below.
– You should not get a loan to purchase any expense that’s consumption based. This consists of buying a TV or perhaps a car. You should also never think about funding a vacation by going for a personal loan.
– You should go for this kind of loan only during the time of emergency. You can do that only should you be sure you are capable of paying back the money in time.
– In case you are investing in a new house and the price of the home is very much higher when compared to house loan, you can bridge this gap by taking a personal loan. It becomes an exceptional case and there’s nothing much that you can do. It’s also a secure investment if the value of your home appreciates.
– This loan is a very good option if it can result in a lot of savings or maybe if it can help you gain possession of any appreciating asset.
If you are going through a situation in which you are repaying a loan, that comes with a very high monthly interest rate and the interest rate of your respective loan is lower, it will be certainly easier for you to go for the personal loan. This is because the latter may be used to settle, or close your higher interest debt.
In addition, in terms of loans, individuals can loan up to the amount they want. However, it is advisable to loan a realistic amount. This is essential since borrowing a lot of money is often declined or loan can be lower than what you desire. As a result, it’s best to ensure to select loans that will fit your cash flow.
It is also important if you compare terms and rates. Surely, there are several banking institutions from which to choose and the institutions vary with their terms and rates. For this reason, you’ll want to search for rates and terms that can satisfy your needs.
In conclusion, you have to “understand that taking a personal loan can be a very easy way to go through in the short term, but in the end it will have a significantly negative impact on your financial status”. It is one of the important things to remember.