Financial difficulties are inevitable. We save for our future and emergencies. But sometimes our preparation fails. In that case we need someone who can help us to pass through these financial difficulties. We end up going to a money lender. We assist if they are good at money lending in toa payoh central. But we forgot to prepare some things that are necessary before we go to a money lender. Here is the checklist you should update before you think of lending money.
● Is it necessary?
When you lend money from a moneylender you should always consider whether borrowing money is necessary. If money is improving your financial situation with time then you should go for it. If you need money for your studies it will help you to get a job and result in higher income, but if you want money for vacation you will end up paying after vacation.
● Does it fit your budget?
It’s not about your income but if you will be able to pay a little amount of money every month within your budget then it will be worth it. Ask yourself if you could afford the interest rate and do you require loan insurance? If you could wait until you save enough for it?
● Does interest rate vary with time?
Some companies vary interest rates according to the market. It will affect your own payment. You need to confirm if they are increasing payment with interest rise.
● What is your credit score?
Credit score is a sneak peak of how you will return borrowed money. If your credit score is low many money lenders might back off due to increased risk of default. Score ranges from 300 to 850 but you should keep a range of 700 to 800 for better chances.
● Can collateral provide us enough money?
Collateral is like a security to money lenders. The value of gold ratral defined by how much money the lender will lend you. You should know the value of your collateral before you ask for money.
Asking yourself some of these questions before borrowing money will help you to increase the chances of success. If you evaluate the factors affecting poorly in your approval then you should step back and improve the report before you think about it.