There are a number of factors to consider before getting loans. [photo/crownsavers.co.]
Shop for better rates
Kenya’s interest rates have been reduced, but still, you can get a noble deal if you experimented a few lenders before resolving on one, that decimal variance could mean a lot. Majority of personal loans are unsecured and involve very high-interest rate.
Penalty Charges
Refusal to repay the loan is a reality we all face. In case you are not able to pay your dues on time, there is normally a very weighty penalty indicted on your credit account.
Credit History
The finest rates are available to those with the good credit history. As a result of capping of interest rates, most banks are anxious about lending for risk of default. Beforehand you should check your acknowledgment score in order to know the likely prospects of getting the loan certified.
Need or greed?
This refers to the purpose for which you are applying for the loan. Individual loans are made available for honest needs like wedding, hospitalization or schooling.
Keep tenure as short as possible
The lengthier the period, the more interest you will pay. The cost of your monthly repayments will obviously depend on the amount you are looking to borrow, but it is also dependent on the period over which you will repay the debt. You can reduce your monthly repayment by opting for a longer term but this will be more expensive because you’ll pay more in interest.
Don’t bite more than you can chew
The principal rule of clever borrowing is what the older generation has been telling us all the time: don’t live beyond your means. Take a loan that you can easily repay.