A personal loan is available to you at almost any point you need cash. If you are looking at getting a personal loan you need to be aware of the advantages and the disadvantages of having one. You need to have a good look into what personal loan you are going to get as there are different types loans to suit your personal needs. When assessing whether a personal loan is right for you, you need to take into account the disadvantages as well as the advantages in order to consider the risks:
Advantages:
- Fast and reliable way to obtain funds
- Large amounts of money can be obtained for almost any purpose.
- They are suitable for costly purchases. In other words if you have something that needs to be paid straight away that is quite costly you can pay this with the loan and spread your costs over a period of time.
- You are able to manage your short term finances
- It is possible to negotiate a lower interest rate with some companies with the high level of competition against lenders.
- For personal loans there are no agents or middle men as you tend to speak directly to the company themselves
Disadvantage:
- A Personal loan will be a long term financial agreement.
- If you choose to pay off a large sum of your loan you may be charged for doing so. Some people do try and do this in order to pay the loan off quicker and it may end up costing a lot more.
- With personal loans you may end up paying a massive penalty if any of your payments are missed. The penalty could be as big as losing your home!
- Eligibility criteria for personal loans are much stricter due to no security put in place, so you need to ensure that you have a good credit rating.
- Personal loans do look very appealing when you are in desperate need of a bit of cash before payday and they do look great when you look at the advantages for them. If you feel you are in a position to be able to pay your installments without any hassle and have evaluated all of the disadvantages then go ahead with your personal loan application.