Managed correctly, personal loans can go a long way to helping ease financial hardship and free up cash flow in the short term.
Need a few upgrades to your lifestyle? Renovations, a holiday experience or wedding perhaps? You can choose a fixed or flexible term loan that best suits your needs.
Benefits of a personal loan include comparatively low interest rates, flexibility on how you use your loan and fixed payments over a set repayment schedule.
Here are some tips on managing your personal loan responsibly while being financially savvy in the process:
Crunch the numbers
A personal loan is ideal for paying for those larger purchases, such as an entertainment centre, or you could even use the loan to improve your career opportunities by doing courses.
Although, it is important to be sure that you are able to afford the repayments.
Draw up a budget where you look at all your monthly and annual expenses, and work out how much of your disposable income you can afford to spend on your monthly repayments.
There are different interest rates available and different repayment terms, plus different loan structures, so be sure to find the right one for your needs.
It may be tempting to lie about your employment status, your income or your affordability on your personal loan application in order to get it approved, but this could backfire horribly.
It’s very likely that the truth will surface, which will put you in a difficult situation.
Lying on your application about what you can afford also means that, in reality, you’ll limit your ability to pay back your loan in the timeframe specified, which can possibly get you further into debt.
Be disciplined in paying it off
The most important part of having a personal loan is being able to afford to pay it off – and often, this involves a fair amount of discipline so that you make the repayment process a priority before you spend money on other things.
One easy way to do this is to set up a direct debit to pay off a portion of your personal loan each month.
Make sure this direct debit is one of the first things to go off your account once you’ve been paid your salary, and then make a plan to be able to spread the rest of your leftover income to cover monthly bills and living expenses.
Choose the right bank
When it comes to choosing the right bank for your personal loan, there are quite a few things that you have to keep in mind.
While you should certainly consider the interest rates, you should also look at the bank’s reliability, ease of use, and repayment options.
You may consider the Standard Bank personal loan as it offers great benefits from a well-established and trusted financial institution.
The money is transferred into your account and is available immediately once the loan is approved, so there are no lengthy waiting periods.
The term and repayments are fixed and do not change, even if the interest rate changes, which means you know exactly how much you have to repay each month and helping you to budget more effectively.
You can use Standard Bank’s calculator to see how much your Standard Bank personal loan repayments will be.
Standard Bank’s personal loans offer the following:
- A personalised interest rate with a maximum of 24% per annum
- Choose to repay your loan over 12 to 60 months
- The option of extending or revolving your loan term
- No early termination fees
- Increase your rewards tier as a Ucount member
- Funds are paid straight into your current account