Versatility is one of the main attributes to personal loans that makes them so attractive. They can be used for anything from making a vacation happen to carrying out renovations that will send the price of your home through the roof. If you’ve decided that a personal loan is necessary, you need to avoid rushing through the process, and making some of these common and costly mistakes…
Not Weighing Up All your Options
It may not seem like it, but taking out a personal loan at all can be a big mistake. Be sure to weigh up all of your options first. If you’re consolidating debt, it may be worth opening a new credit card, and then transferring the balance of your other cards to it, especially if you’re able to pin down a 0% introductory offer. Generally though, these kinds of offers, just like competitively priced personal loans, are only available to people who have solid credit. Having said that, there are still various resources like lendingexpert.co.uk that can be used to find the best deal possible, regardless of your current score and credit history. Never jump at the first offer that’s dangled in front of you, and always take the time to weigh up your different options.
Bending the Truth
One mistake you don’t want to make is thinking that bending the truth about your income on a loan application will get you a better deal. This could not only hurt your chance of getting a loan, but it’s also illegal! True, lenders won’t always make 110% sure that you’re telling the truth on a loan application. However, if they find that any of the important information you included is inaccurate, whether intentionally or not, it allows them to deny the loan. Furthermore, if the lender in question finds out that you lied on your application, even after the money has entered your account, this could be considered a loan default. Making what’s known as a “material misrepresentation” on a loan is just cause for the lender to demand everything you owe them back immediately. Getting approved for the kind of loan you need can be a long and frustrating process, but bending the truth on your application is never worth the risk!
Spending Just Like You Used To
Even after you get the money from your loan, it’s still possible to make big financial blunders. For example, one of the most common mistakes made by people who take out a loan to consolidate heavy debt is failing to change their spending habits. If you go in for consolidation, and don’t address the spending habits that landed you in this situation in the first place, it’s definitely going to come back to bite you. Whatever kind of loan you’re going for, have a good, long look at your budget before taking the process any further. If you’re going to struggle to keep on top of the monthly payments, or cut expenses so you don’t fall into more debt, you may need to look at further options. Read more about spending habits at lifehacker.co.uk.