For a lot of people, their salary is barely enough to cover all their daily expenses and other financial obligations. If money is scarce and the need is real, options such as the HSBC Personal Loan can be the practical solution to your financial dilemma. Commercial banks are offering these loans left and right, so finding the right one should be easy enough. Approval is swift as long as you meet all the requirements and you can establish your ability to pay. There are even loans that can approve your application in just 24 hours.
It’s best to do your homework and educate yourself on the basics of personal loans before you sign up for one. Here are some of things you should know:
- Compared to credit cards, personal loans have lower interest rates
Most personal loans have an annual interest rate of just 20%. It may sound too expensive at first, but not if you compare to the interest of credit cards, which can go around 3.5% monthly and can go as high as 42% annually if you add it all up. Before you submit your requirements, you should consult the loan calculator provided by banks so you can compare loans and their corresponding interest rates, as well as their payment terms.
- You can use it for any purpose
Once the bank has already approved your loan, they really couldn’t check where you really spent the money – it’s at your discretion. Now you can use the money in any manner that you see fit, but the chances of your loan getting approved is definitely higher if you intend to use it for practical purposes. Sure, you are planning to use the cash for a vacation, but it’s wise to withhold the fact from the bank. It’s best to cite reasons such as medical bills, tuition fees, and urgent home improvement when applying for the loan.
- It’s a great way to establish your credit
It’s actually recommended to apply for loans such as RCBC Personal Loan even if you don’t need the money, but for the purpose of establishing your credit history. You can also use credit cards for this purpose, but cards have higher interest rates and fees. Plus, personal loans have fixed rates. If you always pay your loan on time, you can get easy approval for credit cards, auto loans, and housing loans.
- You can pay the loan off in advance
A pre-termination fee is usually charged if you pay off your loan in advance. But more and more banks are waiving this and even agree to a lower total payment.
- Your loan can get approved even without a credit card or bank account
Your loan has better chances of getting approved if you already have an existing credit card or if you have an account with the bank in question. But it doesn’t mean you still couldn’t get approved for your loan without those. You just have to find the bank that will take a chance on your plans to build credit history.
What the bank will do is to ask you to open an account with them once your loan gets approved. They will deposit the loan proceeds in that account.
With banks coming up with more ways to attract new clientele, now if the perfect time to apply for an HSBC Personal Loan. Check out the best deals you can find so you can start establishing your credit history and pay off your debt hassle-free,