Personal loans, as with all debt, can be a slippery slope and so need to be managed carefully.

Here are some tips when taking out a quick loan:

Shop around and make comparisons.

• Even though the National Credit Act has regulated the credit industry, it’s still relatively easy to apply for and get a personal loan.

• Don't be fooled into accepting the first personal loan option you're given.

• Shop around and compare rates, payback time and the flexibility of your budget.

• Many financial institutions offer an online personal loan calculator.

• When you shop around, ensure you know and understand all the fine print and terms and conditions.

Avoid getting trapped in debt.

• As you shop around, keep a sober assessment of your financial situation in mind.

• Make sure you can afford the loan repayments and interest even if emergency strikes and you find yourself with a disposable income lower than what you were expecting.

• A good rule of thumb is to take 10% off your own salary and calculate your personal loan accordingly.

• It’s extremely dangerous to eat into a salary on which you’re already struggling to make ends meet.

• If you find yourself in this situation it’s better to visit a financial advisor to help manage your finances.

Keep your personal loan applications to a minimum.

• Every loan application you make is recorded on your credit record.

• Too many applications reflect poorly on your credit rating.

• This makes larger loans in the future more difficult and expensive.

• Before you even apply for a loan it’s best to check your credit rating to see that all is in order.

• Ascertain independently that you can afford this loan, ideally using more stringent criteria than a bank would.

• This way you need only apply for one personal loan and can be relatively sure it’ll be approved; thus keeping the applications to a minimum and keeping your credit score clean.

Be honest with your credit provider and yourself.

• There’s no point in pretending that you can afford a personal loan that you cannot.

• If there’s a chance you’ll be cutting into your grocery bill every month to pay your loan you probably can’t afford it.

• Don’t take out a quick loan with the assumption that you’ll get a pay increase in the next month or two as you can’t predict the future.

Looking for a competitive rate on a personal loan of up to R150 000? We can help.