It’s been a tough year for the South African economy, with GDP shrinking by 2.2% in the final quarter of 2017, and further drops expected for us in the year ahead. An unfortunate side-effect of this downturn is that more and more South Africans are struggling with only 65% of South Africans being able to pay their rent on time this year.
In light of the current climate, more and more people are looking to borrow money to cover their needs in the short and medium-term. When it comes to taking out a loan, it is more important than ever that we know what to look for, and how to find the right loan for us.
Taking out a loan has plenty of tangible benefits aside from catching up with the bills. You can bring your credit score up to scratch and invest in your future.
However, taking out loans without doing the right research can hinder more than it can help, so here are the three top things we look out for when taking out a personal loan.
When Taking Out a Loan, Timing is Everything
If you’re looking for the cheapest loan, time is the number one factor for many reasons. For one thing, the total Annual Percentage Rate (APR) which reflects the true cost of a loan, is likely to vary at different times of the year. This is because many loan providers base their rates on factors tied to the wider economy, so rates might be more favorable following say, a reported increase in national jobs growth.
Secondly, it’s important to know what length of the loan is the right length, with short-term loans tending to be less risky and easier to pay off than longer-term ones. Shorter loan terms mean shorter rates.
Know Your Score
If we have one golden nugget of wisdom for taking out a loan, know that a credit score is the most important link between you and that money. If a score is too low, it may not be possible to get a loan at all, while if it’s particularly high, lenders will flock to you as you’ve proven your reliability.
If you want to get a loan, make sure to take the right steps beforehand to check your credit score. Make sure everything is up to scratch, then you know that yourself and your lender won’t be in for any unwanted surprises further down the line. Out of the many questions we ask ourselves before borrowing money, this is the most important.
Flexibility is Key
We all have busy lives that are full of surprises. Making sure the terms of any loan we take out are flexible, and that we’re able to ensure a loan’s terms meet our personal needs, is absolutely key.
Always opt for a loan that is customizable to your needs. For example, repayment schedules should always fit your own paycheck, and you should be able to make payments over a wide variety of platforms.
Find Out More
To find out more about how to get the right personal loan, check out our dedicated blog for information from our team of professionals.