Finally! Your loan has been approved! You can now pay for the remaining balance of your children’s tuition fees, plan a vacation, start a business or renovate a room in your house!
Getting a personal loan is one way to get the cash you need. Just remember that you will still need to pay for the loan eventually. Yes, at a later date. But that date will come. So you should keep within your budget. No sudden expenses. No unplanned shopping or trips. Otherwise, that loan will prove more harmful than handy.
Here are a few things you should not do when you finally have your application for a personal loan approved.
Never miss out on the date of payment. Each late payment can affect your credit score and destroy your reputation with the credit unions and banks. Plus, late payments lead to penalties. If you maintain your good credit standing, with no late payments to mar your payment record, you may be eligible for additional loans.
Of course, this is only good news if you can afford to pay for any more of the loans you plan on applying for. If you are, then just check on the terms that you and your loan agent signed on until you get to the part where it tells you what to do, and what to submit, in order to qualify for multiple loans.
Loan agents are there to remind you and help you make your monthly or semi-annual or annul payments. So expect that questions involving your credibility as a borrower will be asked. Be honest with your answers. You may want to overstate the true state of your finances or sources of income, just to get those loan applications approved. But you defaulting on your personal loan is bad news.
So when you come in and meet your loan agent, with all the calculations and projections ready, if your loan agent approves, then go for it. But if your agent tells you it’s risky and that you may end up with late payments, then listen and adjust.
This is a big no-no with credit and debit cards. Remember that your approved personal loan is money that you need to set aside for something else. It’s not extra cash. It’s already been alloted for an emergency, for laptop repair costs, for sudden medical bills.
So, if having access to it will test and strain your willpower, tempting you to buy things you don’t need or go for trips that aren’t really part of your budget, or shop like there’s no tomorrow, then one way to keep that cash safe is to limit your access to it.
Pay for the bills as soon as you get the cash. That way, the money will be out of your hands and you no longer have to worry whether you’ll end up spending it on a few shiny long irons or on shoes you don’t need or on that nifty gadget you’ve always had your heart set on but couldn’t imagine buying until now because it costs as much as a human kidney in some parts of the world.
If that doesn’t work, ask a friend—one that you really, really trust—to hold on to the money until it’s time to pay your bills. Of course, this will only work if your friend is someone who won’t easily give in to you at the first moment you try to get your hands on the cash. Choose this friend wisely.
Or, you can create an entirely different plan. Just make sure it works. Not wasting the cash you get from your personal loan is smart. Otherwise, you may just find yourself in debt, with a loan you’ll have no chance to pay for.
About the Author:
This article is prepared by Compare Hero for Finance Career Education. Compare Hero is Malaysia’s leading credit card comparison website. Compare a broad range of financial products, from credit cards to personal loan plans.