5 Questions You Need to Ask Yourself Before Applying for a Loan
If you´re thinking about applying for a loan, there´s nothing to be ashamed of. What´s most important is that you´re well informed and know what to expect.
If you are thinking about applying for a loan, there´s nothing to be ashamed of. In fact, from car loans, credit cards, mortgages, and student loans, almost everyone has a debt or form of credit of some sort.
So, if you are thinking about applying for a loan, the most important thing is that you make informed decisions.
Firstly, make sure you´re applying for a loan for the right reasons. Secondly, it´s vital you explore your options, and that you know what to look out for when applying for a loan.
Before applying for a loan, there are five questions you should always ask yourself:
How Much Do I Really Need to Borrow?
Before applying for any loan, ask yourself how much you really need to borrow. If the purpose of the loan is to buy an item, maybe a new washing machine or freezer if yours has packed in unexpectedly. Is there anything you can cut back on or sell to raise the cash and reduce the amount you need to borrow?
Perhaps you require a loan for more time-sensitive reasons and there isn't time to make cutbacks and save.
In any event, always review your budget and make any necessary adjustments. Once you have an up-to-date budget, you will be able to see how much money you have available to allocate to loan repayments.
Do I Have Enough Income to Repay the Loan and the Interest?
The first thing to be aware of when applying for a loan is that the required minimum monthly amount of your loan is not the total amount. In addition to the minimum monthly repayment, your loan will also be accruing interest. Depending on the loan, the interest rate will accrue daily, weekly, or monthly.
With your revised budget, make sure that your monthly income is enough to repay at least the minimum monthly amount, and ideally, the interest accrued during the period.
To explore the total cost of a Ferratum loan, including interest charges and monthly payments, take a look at our online loan calculator.
If, after using the loan calculator and reviewing your budget, it appears you will be struggling to make loan repayments, then taking on a loan is not recommended.
How Long Do I Have to Repay the Loan?
The loan term, or the time that you have to repay your loan, varies depending on the type of loan you apply for and the amount you wish to secure. From weeks to months, choosing the loan amount, loan term, and the associated interest rates according to your budget is most important.
One thing to keep in mind is the ability to repay your loan early. Ferratum allows its customers to repay their unsecured loans without any early-repayment penalties. This option allows customers to make repayments based on their own budget, which makes repaying their loan more flexible and comfortable.
Make sure whichever financial institution you choose allows you the ability to repay early without incurring penalties.
How Will I Manage My Other Debts?
If you already have other debts such as a credit card or other loans, taking on more debt is not a good idea as it will only result in you becoming further in debt.
Before applying for a short-term loan, make sure you are currently making repayments on your credit card and other loans comfortably. Does your budget allow you to manage another repayment?
Have I Chosen the Best Provider for the Loan I Want?
There are plenty of financial institutions on the market offering short-term loan options including banks. In addition to the fees, and terms and conditions, it’s important you feel comfortable with the financial institution you choose.
Make sure all fees are clear, the company is credible and trustworthy. Read online reviews from other users on a website such as Trust Pilot to see which companies have a good reputation.
The process of finding the right credit institution will help you feel more confident that your choice is the right one.
At Ferratum, we believe in doing things differently. As an international pioneer in the field of financial technology and mobile lending, we have expanded our operations to 24 countries since 2005.
When you apply for one of Ferratum’s online loans, you can be confident you’re in good hands. We believe in complete transparency. No hidden fees. In fact, Ferratum is authorised and regulated by the Financial Conduct Authority (FCA) and are members of the Consumer Credit Trade Association (CCTA).
Our mission is simple – to provide the best, fastest, and most user-friendly lending and banking services available with 24/7 personal customer service. Apply online in just minutes and receive the money you need within one day.
When it comes to money, with Ferratum, you’ve got less thing to worry about.
|Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk. Representative example: APR 1270% if borrowing £400 for 4 months. Interest rate: 292% p.a. (fixed). Total amount repayable: £665.48 by four instalments of £166.37. Maximum representative APR: 1604% if full loan repaid after 7 days.|