5 Tips for Choosing the Right Loan

Choosing the right loan can be difficult, especially when you’re new to the world of loans and finance. There are so many different sorts of finance offered, as well as different types of jargon–secured, unsecured, revolving, instalment, DTI, credit, and more.

This blog post will guide you through choosing the right loan for you: how to decide on purpose, choose a lending company, what they look for when deciding whether they should loan you money, and some of the key terms you should know.

How to Choose the Right Loan

These are Loan Wave’s 5 tips on choosing the right loan.

Know Whether You Can Afford It

Before shopping for loans, you should know what you can afford. First, consider the other debt or finance you have to your name, income, and expenses. Your debt should not take up more than 30% of your total income–remember, you still have essential expenses, like food to buy and insurance premiums to pay.

Decide on Purpose

When you know you can afford the loan–that all your repayments plus this one won’t take up more than 30% of your income–decide what you’ll use it for. Sometimes, you can only use loans for specific purposes, like buying cars or houses. This isn’t the case with Loan Wave. Here, you can use your loan for whatever you would like.

Remember that you should use your loan for expenses that are not frivolous, things that will not create something called consumer debt. Consumer debt is when someone takes out finance to purchase goods and services that are non-essential (like clothes, holidays, and gifts). Consumer debt is detrimental to your long-term financial well-being.

Note that cars are not consumer debt, since cars are considered an essential purchase (we use them to commute).

Consider Consolidation

If you have many small debts, like store cards, credit cards, and other personal loans, why not take out a loan to consolidate your other debts and cover the expenses you would have used your finances for? Consolidation loans work by paying off all your other debt at once, saving money on admin fees and interest. Often, you have more time to repay the debt, too, freeing up more room in your budget.

Choose a Transparent Company

Make sure the company you decide to borrow money from is transparent about their financial agency registration, terms, interest rates, fees, and other vital information. You should not choose a company with hidden charges or one that isn’t licensed.

Be sure that they properly assess your ability to repay them, otherwise they are recklessly lending money, which is illegal.

How to Choose the Right Loan

Borrow Money from Lenders who Care

At Loan Wave, you’re not just another number. You’ll have a dedicated finance and loan expert at your side ready to discuss and explain your loan terms with you. We’re ready to negotiate based on your circumstances, listen to your concerns, and help you find a loan that you can afford and that suits your needs.

Choose the Loan Wave, the lenders who care, and enjoy smooth financial sailing. Apply for a Personal Loan Today!