subject: Why It Pays to Take out a Personal Loan when Interest Rates Are Low [print this page] Why It Pays to Take out a Personal Loan when Interest Rates Are Low
Interest rates are at an all-time low in most countries. In South Africa, it seems that the Reserve Bank, which is responsible for setting interest rates, may even cut the current central rate by a few more basis points in the coming months.
This is not particularly good news for savers. But if you want to take out a personal loan, it is probably the best news you will hear this side of Christmas.
It is strange that the global slowdown would have such a positive effect, but that is the way macro-economic policy works. So, if you need some money - perhaps you want to consolidate existing loans, maybe you would like to fix up the house a little, or buy a new car - now is the time to act. There are a few things you will need to think about.
As indicated above, it is possible that interest rates will come down a little further, so you may want to hold off applying for your loan until the New Year. But in the interim, you can certainly start pulling together all of the necessary paper work that you require in order to meet the fairly stringent personal loan qualification criteria that most lenders will insist you adhere to.
This means getting hold of your last few months of bank statements. It might also be worth your while to run a quick check against your name at one of the credit bureau agencies - the last thing that you want to find out when you put in your loan application is that someone has taken a judgment out against you. Better to find out now and then take whatever action is necessary to clear your name.
So, assuming you have gathered all the documentation, the actual process of applying for your loan should be pretty easy. And if you have a decent credit rating, you'll find that the money is deposited in your account pretty quickly, leaving you free to take advantage of super low interest rates!
