Borrowing funds from banks and lending institutions is a huge financial decision. Often, individuals borrow loans that have a long tenure. Repaying the loan amount for such a long period may lead to serious debt issues in the long run. For this purpose, it is important to make a borrowing decision only after careful consideration of certain factors.
Importance of financial advice
Many individuals seek the advice of a financial advisor before borrowing. The advisor explains the pros and cons of the loan on the basis of your financial situation. The advisor first reviews your financial holdings, assets, and liabilities, and then suggests if borrowing is a feasible option. An advisor, therefore, provides relevant advice and helps you meet your financial goals.
Financial advisor’s fees
Typically, financial advisors earn their living through hourly charges or flat rates. A flat fee is an amount that is paid at the beginning or at the end of a financial service. An hourly service fee, on the other hand, is a payment mode through which an hourly amount is charged by the advisor. It is important to meticulously make the right decision as advisors may unnecessarily invest additional time to gain additional income.
Tips to consider
It is necessary to keep in mind a few tips while employing a financial help. Check for the advisor’s qualifications and experience. Ask necessary questions about their current clients as this will help you identify whether they have the experience to deal with individuals with similar goals and issues like you. For example, you may ask your advisor if he has dealt with providing advice for those with bad credit. This will go a long way in ensuring that the interest of the advisor is aligned with yours.
Conduct your own research
In case you do not wish to seek expert financial advice, you may head out on your own. Consider various options and research online for borrowing tips.
Ask yourself the following three questions.
- Will I be able to afford the monthly EMIs?
- What term is ideal for me?
- Does my financial position allow me to repay the loan amount on time?
Answering these questions will help you determine if you should go ahead with your borrowing decision. Also, check for eligibility criteria and the documentation required to apply for a personal loan online. Check the total cost associated with the loan, like interest rates, processing fee, legal charges and various other costs.
A financial advisor may give you the required advice and financial knowledge. However, it is up to you to make a wise financial decision pertaining to the management of your personal finances.