There are now a myriad of choices to choose from in applying personal loans. From individuals, credit unions and banks offer you tempting deals such as very low interest, fast transaction, hassle free processes, insurances and many more! Sounds enticing right? On the one hand, personal loans can help us in many ways such as having emergency money when you need it the most. But on the other hand, there are a lot of dangers when carelessly applying for a loan.

Depending on Annual Percentage Rates

APR can be manipulated. Before applying for a loan, do not depend mainly on comparing the APR. Sometimes, lenders won’t tell you about hidden charges. Preferably, measure the loan’s ultimate cost based on the total amount you will pay, including other fees and interests.

Privacy Concerns

Banks and other formal credit unions provide strict privacy rules however, some lenders may not. Always consider how the lenders give importance and respect to your privacy especially regarding money matters.


            Some lenders propose other add-ons such as insurances if ever unexpected circumstances may happen along the way. However, we should be careful since not all add-on propositions are free. These may also appear as hidden fees or charges. So before applying a loan, make sure the lenders make it clear, plain and simple.

Pay-off Penalties

            Consider in mind that life has many uncertainties. Always put in mind future possibilities of failed pay-off and ask the consequences if you will not be able to pay the loan on time. Some lenders will not tell you upfront that if you fail to pay on time, there are penalties such as increased interest rates or additional fees and charges.

Complicated Contracts

Supposedly, applying a loan is as simple as you borrow money and they will lend you with specific interest. However, other lenders tend to pressure you to immediately sign a contract in which was not yet made clear to you. This is a big NO-NO. This only indicates that the lenders may want you to miss some details such as additional fees and charges or other penalties. And before you sign a contract with your lenders, make sure you do first a money lender review.