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Important Tips for a Smooth Personal Loan Application

About the Author:

Ray is a sought after thought leader and an expert in financial and money management. He has been published and featured in over 50 leading sites and aims to contribute articles to help novice financial planners. One of his goals is to impart his knowledge in finance to educate and help ordinary people create and achieve their financial goals

When it comes to buying highly coveted and expensive items such as cars, the latest gadgets, or even a house, there are many means and ways to obtain these material possessions. If your budget is tight, one way to acquire these items is through getting a loan from financial institutions like  Rapid Loans. They offer different types of loans online for a seamless loan application experience.

A personal loan is usually used to purchase personal items, fund vacations, and other types of expenses that are currently out of your budget.  Below are some tips to help you get the funds you require.

  1. Know Your Budget

It’s essential to know how much monthly payment you can afford before applying for a personal loan. Assessing your financial status and taking a good look at how much money you can spare per month is the first step to avoiding defaulting on your loan. Using loan calculators available online can easily help you determine how much you can borrow and the estimated monthly payments will be. If you decide to apply for a loan with a variable interest rate, remember to leave yourself a little wiggle room for the payments if they go up due to interest rate changes.

  1. Choose Your Loan Type

For car purchases, it might be easy to go with a car dealer for financing but make sure the terms are fair and the charges are minimal. With a personal loan, you will have a few types to choose from including fixed-rate, secured, and variable rate loans.

With a secured personal loan, you will have to put down collateral and will generally get the lowest rate possible. For fixed-rate loans, you will get an interest rate that will stay put for the length of the loan. You will always know what your payments will be. For variable interest rate loans, the payments can change, but you can also make additional payments towards the principal balance.

  1. Get Pre-Approval

It’s easier nowadays to get pre-approved online for a personal, car, or other types of loan. Most of the time you can get a response for your personal loan application in a matter of days. Having conditional approval before buying a car allows you to shop around and get the best deal possible. Getting a preapproved loan gives you the confidence to negotiate and get the best arrangement that fits your budget. 

  1. Start Shopping

If you are purchasing a car or the latest gadget, this is the part of the buying process that many love. Once you have everything else taken care of with the loan, you can start looking and shopping for your new acquisition. With a personal loan on hand, your much-desired car, phone or tablet is within your reach. 

For car purchases, it is important to note that buying from a dealership offers more protection because they are required to offer you a warranty on your purchase. With private sales, you may get a better deal, but it is seldom that warranty is guaranteed. Before you buy from a private seller, be sure to take the car to your mechanic to get checked thoroughly.

  1. Close the Deal

Once you’ve found the items that you want, you can now proceed to the next step of your personal loan application process. If you have a preapproved loan, you can now finalize the approval by talking to your financial representative and submitting additional requirements if needed. For a car loan application, the funds are usually deposited straight to the car dealer or private seller.  

The above steps might be easy and simple ways but sometimes these are the things that we usually miss. Having a solid and good financial background before taking out a loan ensures that you can responsibly pay it off and at the same time enjoy your much-desired car, gadget, or vacation that enhances the quality of your life.

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