Buy Now, Pay Later: 5 Things You Need to Know About Personal Loans

If you have visited our Buy Now, Pay Later section, you know that there are ways to buy your dream shoes without paying for them in cash immediately. Stores now offer deferred payments and financing options for shoe enthusiasts who want to enjoy a shopping spree.

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You also have the option to use personal loans to finance your new shoes. A lot of people use personal loans to finance a wide range of activities, from renovating their houses to making bigger purchases like buying a new pair of Gucci sneakers. Personal loans are also designed to be very flexible, giving customers more options when it comes to repaying their loans.

There are a lot of personal loans to choose from too, especially now that the market is very competitive. Financial institutions are competing for your business, so don’t be surprised to find great deals on personal loans as you begin your search. Before applying for one, here are the five things you need to know about personal loans.

Lenders Matter

Choosing a personal loan is not only about finding the best deal on the market. While comparing personal loans, you also need to look into the lenders behind the offers you receive. This is because working with a reputable lender is highly beneficial when you use personal loans to finance big purchases.

Different types of lenders may have different personal loans in their service line-ups. Aside from banks, you can also get personal loans from online lenders and credit unions. Depending on where you live, there may be local financial institutions with great personal loan offers to look into as well.

A reputable lender will also work with you as you try to repay your loan. Should you run into any issue with your loan repayment, you can consult your lender and work out a way to continue repaying the loan rather than dealing with additional issues like collection.

There Is Always a Better Deal

As tempting as it may be to go for the first personal loan you come across, the right way to find a good deal on the loan is by comparing offers from multiple lenders. You will not only see variations in interest rates but in terms and conditions of the loans too.

Settle for the most beneficial personal loan to use. I say “the most beneficial” because personal loans can have the same interest rate and still differ in pricing structure and other fees. You can save a lot over the duration of the loan just by opting for the personal loan with smaller fees.

One fee that you want to check is the origination fee. Origination fees are attached to the loan by lenders in order to make their personal loans more appealing for lower interest rates. However, a too high originating fee actually makes the personal loan more expensive. Make sure you use the total cost of using the personal loan as a benchmark when comparing options.

Adjust Your Principal Amount

Always borrow the amount of money you need, and not the amount of money you want. It is easy to get a personal loan of $5,000 or more approved these days, but that doesn’t mean you should borrow the maximum amount. Increasing the principal amount will only increase the amount you have to repay later.

Borrowing more than you need actually makes the loan itself more expensive – you have to pay more on interest and other fees to use the loan. At the same time, you may not use the extra money for productive purposes, reducing the value of the loan even further. Stick to the price of the shoes you want and borrow nothing more.

There are other things you can do to reduce the principal amount of your personal loan. Trying to raise money for the expense or making cuts to your expenses in order to reduce the amount you need to borrow for your dream shoes are steps that you should also consider before applying for a personal loan.

Get Approved Quickly

One key to getting your personal loan application approved quickly is knowing which loan to apply for. If you have a bad credit score, for instance, you want to apply for a personal loan from lenders that don’t do credit checks when reviewing your loan application, such as Bonsai Finance.

Bad credit personal loans are actually great financing options to consider. They are not too expensive and may be more affordable compared to credit cards and other ways to defer payments for your new shoes. You also have more control over the repayment term and the cost of the loan itself.

Make sure you enter valid and accurate details as requested by the application. This way, those details can be verified quickly. In the best-case scenario, you can get a personal loan approved in a matter of hours when you apply for one online.

More importantly, you have to supply a complete application. As mundane as it may sound, not submitting the complete set of details and supporting documents is still one of the most common reasons why many personal loan applications are denied.

Read the Agreement

Last but certainly not least, make sure you read the full loan agreement carefully before deciding to apply for the loan. As a customer, you have the right to ask for a written draft of the loan agreement before applying for the financing option.

Even when you are not using the personal loan to pay for new shoes, being careful with the decision to apply for one is still highly recommended. Compare lenders and personal loans to make sure that you get the best deal possible.

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Once you are certain that you have these basics covered, you can continue with your application for a personal loan. You will be able to get the loan approved and the financing you need cleared in no time, which means you can buy that gorgeous pair of Gucci pumps or the new Aimanta from Christian Louboutin before they go out of stock.