Even on the best days, it doesn’t hurt to have access to a sure source of funds you can use to do any number of things. Considering this, one resource many Malaysians believe they can count on is a personal loan. But what is a personal loan, and should you trust it? Let’s find out!
Personal Loan – What to Know
Simply put, a personal loan is a type of loan you can get to cover a wide range of individual bills and expenses. These loans are usually available from banks, credit unions, and other financial institutions. Although some personal loans have to be secured, more and more, you can quickly get unsecured personal loans in Malaysia with ease today. All of the above is pretty common knowledge. But here’s something you mightn’t know:
Personal Loans Are The Leading Cause Of Bankruptcies
That alone should let you know that you must be extremely careful when tapping into this resource. Generally speaking, you should only consider getting a personal loan if you’ve exhausted other less intense ways of earning money.
When NOT To Get a Personal Loan
It’s undoubtedly true that several circumstances can compel you to get a loan. With that, below are three (3) situations you should never consider taking out a personal loan.
1. To Pursue An Investment Opportunity
No matter how sure the investment opportunity sounds, never secure a personal loan to cash in on it. It is because even seemingly stable investments can topple for no apparent reason. That’s even more so the case in these financially uncertain times.
2. To Pay For Large Items Or Go On Vacation
Again, it might be tempting to get yourself that latest game console or follow your friends on a trip to the Bahamas with a personal loan. Before you do, remember that you’ll still be paying for that enjoyment long after the thrill of it has worn off. So, instead of getting a personal loan, save toward that goal. Although this might take a little more time, it’ll be much more satisfying when you hit your target.
3. To Pay Off Another Debt
Getting a personal loan to pay off a housing loan or credit card debt may seem wise, but what you’re doing, in reality, is replacing one debt with another. And, if the personal loan interest rate is higher than the first loan, you’ll likely end up even worse.
What To Do If You Have To Get a Personal Loan
Now, if you have to get a personal loan due to an emergency, you should look for the interest rate and the effective interest rate. One of the best ways to navigate these waters is to use reliable financial tools like a loan comparison calculator during your search. These resources will make finding the ideal loan for you that much easier.
