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Basics of Personal Loan

Before you start the Personal loan application process, you should know the basics of how the whole borrowing process works. The more you understand, the faster you can make it work for you.

These are the steps involved:

1. Gather information

Find out everything you can about the type of Personal loan you want. By reading this section, you are already halfway there.

2. Talk to the bank

Unless you know exactly what you want, and how much it is going to cost you, it is advisable to talk to your bank manager. He/she will help you assess your individual needs, repayment options and insurance requirements. They will even help you fill in the form.

3. Access your loan

The bank may need to evaluate your financial position and assess your repayment ability.

4. The decision

The bank will tell you whether the loan is approved, usually by letter.

5. The offer

Read the loan approval letter carefully, as it will detail all of your obligations. If you are still unsure, your contact at the bank will be happy to answer your questions, or you can check it with a solicitor or an accountant.

6. Accept the offer

Once you are satisfied with all the details of the loan, you will have to sign the approval letter and perhaps some other documentation.

7. Obtain the money

This is called the "loan drawdown". After a short period for processing, the money is usually paid directly into the bank account of your choice.

8. Make your first payment

Your repayments will most likely be debited directly from the bank account you have selected. To make this easy, the bank will suggest that you repay by setting up an automatic payment scheme. All you have to do now is to make sure you have enough in your account each month to make your repayments on time.

For more tips and information, consult our Frequently Asked Questions and How to Apply sections of this website.

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