Ms. Career Girl

Top Menu

  • Home
  • Media
  • About
    • Terms of Use
    • Privacy Policy
  • Advertise
  • Contact
    • PR and FTC Disclosure
  • Subscribe

Main Menu

  • Home
  • Careers
    • Productivity
    • Career Confessions
    • #SideHustle
    • Job Search Advice
    • Resume Optimization Tool
    • Job Board
  • Lifestyle
    • Life After College
    • Health & Beauty
    • Style
    • Money
    • Travel & Leisure
    • Product Reviews
  • Relationships
    • Dating
    • Marriage
    • Working Moms
  • Specials
    • Real Career Girls
    • Style Your Life
    • Book Club
    • Giveaways
  • Home
  • Media
  • About
    • Terms of Use
    • Privacy Policy
  • Advertise
  • Contact
    • PR and FTC Disclosure
  • Subscribe

logo

  • Home
  • Careers
    • Productivity
    • Career Confessions
    • #SideHustle
    • Job Search Advice
    • Resume Optimization Tool
    • Job Board
  • Lifestyle
    • Life After College
    • Health & Beauty
    • Style
    • Money
    • Travel & Leisure
    • Product Reviews
  • Relationships
    • Dating
    • Marriage
    • Working Moms
  • Specials
    • Real Career Girls
    • Style Your Life
    • Book Club
    • Giveaways
Money
Home›Self›Money›Understanding personal loans and avoiding bad deals

Understanding personal loans and avoiding bad deals

By Maria Bashi
Nov 8, 2017
16178
0
Share:
business loan credit repair

In theory, personal loans are pretty simple and straightforward, but there are things that can surprise you and put you in a bad spot. It’s important to understand how personal loans work but also what kind of dangers they come with. This will help you avoid those dangers and only get into deals that you can be sure are safe and won’t make you regret them later on. With that said, let’s start off by taking a look at what a personal loan implies exactly.

The basics of a personal loan

While there might be some differences in the details between different lenders, a personal loan will generally consist of a fixed term and a fixed interest rate. This means that you have a precise due date, and you have until that date to pay back the amount of money that you have borrowed. Having a fixed interest rate means that you know from the beginning how much money you will need to pay in top of repaying the loan, and that amount won’t change as time goes by.

Staying away from the webs of bad deals

Personal loans can be very tricky if the lender desires them to be so. There are plenty of dangers to watch out for and navigating this web of potential bad deals can be really hard, especially for someone that isn’t a loan regular. Here are the most important things to watch out for.

Origination fee

An origination fee is something you will encounter with most loans. This type of fee is usually taken from your loan upfront, which means that you will not get the exact amount of money you asked for. In order to not get completely screwed by the origination fee, make sure to ask for just enough extra money to cover the fee. This way the fee will be deducted and you will end up with the amount you wanted in the first place.

Insurance

Insurance is generally not a bad thing but it usually is if it comes paired with a loan. When giving you a loan, the lender will most likely try to make you leave the building with an insurance deal as well. Beware tactics that might try to bring your family or close ones into the mix, with a sale pitch like “protect your family if something happens to you”. The insurance deals they propose at the end of a loan deal are usually really bad and you should avoid them. Just get the loan and run!

Pre-computed interest

This type of interest implies that the lender calculates how much interest you would owe them as it accumulates over time, and adds that to your balance upfront. This might sound tempting for some, since you know from the very start exactly how much money you will have to come up with to fully pay back the loan. However, the possibility of you fully paying back the loan earlier is huge. They reassure customers with a re-calculation of interest but in the end you still end up paying more than you should on interest, so if your lender tries to give you a pre-computed interest, you should pass.

 

Tagspersonal loans
Previous Article

Five Steps Mothers and Mentors Can Take ...

Next Article

Paperless: Are You Really Ready To Make ...

0
Shares
  • 0
  • +
  • 0
  • 0

Maria Bashi

Related articles More from author

  • alternative financial options
    MoneySelf

    Understanding Your Alternative Finance Options

    Jun 7, 2016
    By Maria Bashi
  • MoneySelf

    Eww… Credit Card Debt

    Dec 22, 2013
    By Ms. Career Girl
  • Career ConfessionsMoneySelf

    Financial Savvy is Sexy in 2009

    Dec 9, 2008
    By Ms. Career Girl
  • MoneySelfWork

    Save a "Latte" Money!

    Dec 10, 2008
    By Ms. Career Girl
  • MoneySelf

    The Start of Your 2009 Financial Makeover

    Dec 26, 2008
    By Ms. Career Girl
  • MoneySelf

    10 Things You Should Know About Credit Cards

    Dec 27, 2008
    By Ms. Career Girl

  • Career ConfessionsLife After CollegeSelfWork

    A Tale of High Achieving Career Ladies

  • work in sales
    Life After CollegeSelfWork

    Why an entry level sales job is a great way to kickoff your career

  • #SideHustleLife After CollegeSelfWork

    Get a Modern Day Career Path Dream Catcher

Subscribe

Job Search

As seen on

career advice blog badge oriel badge

Featured On

  • About
  • Contact
  • Advertise
  • Resume Optimization Tool
  • Privacy Policy
  • Terms and Conditions
© Copyright 2021 Ms Career Girl