Financial emergencies are often hard to predict. If you have a long list of unpaid bills and credit card payments, you might want to take a personal loan to consolidate it all. A personal loan, also called a salary loan, is basically a cash advance with an upper limit that’s meant for personal use. From paying your existing bills to funding a purchase or a travel plan, you can do anything with the loan amount. Below are some of the things you need to know.
- Firstly, such loans are meant for a short term, usually for 3 years. Salary loans can be both secured and unsecured. If you have attached a collateral asset, the interest rates will be lower. Most people, however, prefer unsecured loans, which are free from additional liabilities.
- If you are taking such loans for the first time, it’s best to read the terms and conditions in detail. This is particularly important for avoiding unexpected charges and costs that might be added by the lender without your knowledge.
- Check whether the loan can be repaid ahead of the maturity term. In such cases, the borrower needs to pay the full amount along with the interest and a corresponding fee. Make sure that you check the additional fee before applying.
- The interest rate is often the first concern for borrowers, but unless you check the other things, it’s hard to take a call. The maximum loan amount can be as much as four times of your current salary, but there might be upper limits.
- Personal loans are subject to approval, although getting the advance is easy these days, as long as you have a stable job and complete the paperwork as needed. For those who are working abroad and need cash, they can check for an OFW loan in the Philippines.
- For such advances, you need to have a minimum income, as stated by the lender. Check online to know more on this. There are numerous portals that offer information on different personal loan lenders with terms, conditions and additional requirements.
- Finally, you might want to know penalty charges for late payment. People often miss their loan installments and end up paying a heavy charge. If you don’t want to disturb your credit score and market value in the loan market, it is always advisable to pay on time.
Take a look online to know more about personal loans!