Going it a loan
Imagine getting a whole lot of money to spend any way you want! Now imagine realising you’re going to have to pay it all back. With interest. Not so nice! It can be tempting to rush into a bank and fill out a bunch of forms for a loan but it is important to remember a few key things, such as: why are you getting a loan? Do you really need one? What is the interest rate? Can you afford it? If you’re at the stage of signing documents then you’ve surely thought about all this, and received advice from a banker or financial professional.
When it comes to acquiring a loan, for whatever reason, it helps if you have a nice clean credit rating. Now, no one is perfect, but basically your personal credit rating determines what kind of loan you may be eligible for. The credit rating is a statistical method to determine the likelihood of the individual (you) paying back the money borrowed. It is made up from a number of different factors such as previous credit performance and current level of indebtedness. To have a ‘clean’ credit rating usually means that you need a ‘clean’ credit history. This may sound a little ominous but all it really comes down to is paying bills on time, keeping current debts to a minimum and paying them off as soon as you can. Easy right?
Once you’ve got all the credit rating biz sorted, you’ve got nothing standing in your way for a loan, except perhaps a bank. A lot of banks have become fairly strict on who they give loans to, which is actually a good thing seeing as you don’t want to see yourself in the awful position of your house, car or pet iguana being repossessed. There are plenty of friendly people at your local bank that can give you advice on the right type of loan, but always check the interest rate, and don’t be afraid to bargain and make sure you examine competitor’s rates. Good luck!