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The Number One Most Important Thing to Think About When Applying for a Personal Loan

Posted September 9th, 2010
by PersonalLoans.org Staff

There are a lot of things to consider when applying for personal loans. You want to make sure you are dealing with a reputable company, of course, and you want to make sure that you are getting the best interest rates that you can, given your credit score. You want to make sure that you borrow enough to accomplish or obtain whatever it is you’re taking the loan for in the first place. You also want to make sure that you fully understand the terms of any loan before you sign on the dotted line.

But more than anything else, there is one thing that everyone who applies for personal loans should consider:

Can I pay this thing back?

Credit makes a wonderful servant. It allows us to do and get some things we would never be able to pay for all at once. And, used correctly, there’s nothing wrong with taking out a little credit. However, that wonderful servant is a complete bitch if you let her master you. Getting behind on payments, even once or twice, can really affect a lot of things in your life.

Most of us are fully aware that it will affect our credit score if we make late payments, or, worse, miss a payment or two. And most of us know that a lower credit score means we may not be able to borrow in the future. Or, if we can borrow, it will cost us more in interest payments. But, were you aware that your credit score can also affect you in other ways?

  • In many cases, a low credit score can hinder you from getting a job. This is especially true when it comes to working within the financial sector, but more and more employers are checking credit for any employees who handle money, or who are placed in any position of trust.
  • Landlords typically check your credit before deciding if they will rent an apartment to you. You may be denied an apartment, or asked to offer a larger security deposit if your credit score is low.
  • Certain service contract items, such as cell phones and satellite or cable television might not be willing to do business with you if you have a low credit score.

Obviously, we all need to keep our credit scores as high as we can. And that’s why, if you’re considering taking out a loan, you really need to ask yourself whether you can afford the payments. If your budget is so tight that you’ll have to skip a payment if something comes up, you’d be better off to skip the loan in the first place.

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