At least once in our life, we all want to take a loan to buy things we cannot pay for. Personal loans are an amazing solution when you require fast cash for a big important expense. Personal loans in the Philippines are quite great and on a high at the moment. Education, real estate and so many other things have become costly and in such a case, you need to opt for a loan to fulfil your needs. But are all of us using the loan properly or taking it out correctly? Here are 5 costly mistakes you are making…

1. Compulsion borrowing of loan: Have you thought it deeply before you are taking the loan? If you don’t really need a loan, then why are you taking one? If you can just borrow some money from your family and repay them on time, then that is a better option than taking a personal loan. For instance, if you take a HSBC personal loan, then you will have to pay back the amount plus interest rate, and if you fail to repay on time, you will have to pay the penalty charges too.

2. Incomplete paperwork: Forgetting to submit all the essential documents can also lead to a frustrating time during the loan process. Your process will go slow, and you will have to make trips to the bank to submit the documents. Make sure you keep all the documents ready before you head out to apply for the loan or scan all the documents if you are doing the process over the internet.

3. Incomplete disclosing: If you don’t complete your loan application with 100 per cent honesty, then you can go to the court. Incomplete disclosure sometimes can lead to a court case, which can be quite an issue. If you have any faulty records, then let the lending company know about it. A small mistake can be converted into a fraud case, which can put you in jail.

4. Taking for someone else: Are you taking out a loan for someone else under your name? This is a huge mistake! The other person is not going to be reasonable for the repayments to the bank, and if that person misses out on giving you an instalment, which leads to you not paying to the bank, then you will be held for the problem. What if the person runs away without returning the money? You will be stuck in a big mess for someone else.

5. Not comparing options: Don’t just stick to one bank or company for your personal loan. Shop for deals on the internet and find something that suits you the best. You might actually settle in for something expensive while you could have gotten something cheaper from another bank. You don’t have to make quick decisions when you take a loan. You can spend weeks on searching the right one and calculating how you will repay.

So, don’t rush into taking a personal loan and end up making these 5 mistakes!