Risks associated with personal loans.

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Risks associated with personal loans.

Personal loans are one of the best loans as they are quickly processed, flexible, versatile and hassle-free. But, before borrowing a personal loan, it is necessary to know about the risks associated with the personal loans.
By mentioning the word “risk,” we do not mean, that you should avoid borrowing a personal loan.
If your finance management and loan-planning are good, then these risks should not bother you much.

If your finances are good and you are responsible borrower looking for a personal loan, Ficc is the best place.
To apply for a personal loan, please visit this link, www.ficc.fi.

Below, are the risks associated with personal loans-
1.High-interest rates-
Banks are not interested in loaning you without collateral involved, and in this case, private loan-lending organizations can help you, but only with a high-interest rate. The interest rate varies from 10%-40% depending on the lender.Your credit score, if good, can reduce the interest rate. But, if your credit score goes down during the loan period, then the lender, can alter the interest rates.

2.Part-payments will not be allowed-
Most of the lenders, will not allow you to make part-payments, that help you to curb the high interests. Few lenders allow part-payments only after a certain period, say 6-7 months.

3.Precomputed interests, may not help you if you are planning prepayment-
Precomputed interests are calculated based on the original payment schedule, and it does consider your payments done so far. While, the simple interest is calculated on the amount that you owe to the lender presently.

4.Prepayment penalties-
Some lenders will allow you pay off your loan early, after a certain period, but some don’t. The lenders who don’t allow to prepay may charge you with a penalty if you try to make an early payment.

5.Origination fees-
You must be careful about the processing fees, as these are most of the times hidden.

You need to find lenders who are transparent with their charges, and their loan contract must clearly specify all kind of charges involved in your loan.