Short–term loans, also known as payday loans, can be a huge help when you are struggling to stretch your money. Financial planning is key to making financial decisions to help you reach your long- and short-term financial goals. At MyMulah, we understand that first-time borrowers may have questions. Read our guide on financial planning tips for first-time borrowers to get expert advice on strategies for success.
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Understanding first-time loans and the importance of financial planning
A personal loan can be a huge help when you are struggling to make your money last until payday. When you take out a first-time loan, you need to make sure you are in a good position to pay the money off at the end of the term.
Financial planning is essential for first-time borrowers. This helps you create a strategy for success, ensuring you not only pay off the loan on time but also that you only borrow what you can afford. Our short-term loan calculator can help with that.
5 financial planning tips for first-time borrowers from experts
1. Understand your financial position and check your credit report
Your credit score tells potential lenders whether it is a risk to lend money to you. Your score will change depending on different factors such as:
- How many accounts you have
- How long you’ve had the accounts for
- How well you manage your debt
- If you are close to exceeding your debt limits
A score over 610 is considered ‘fair’. Anything below this is considered ‘bad credit’ and suggests to lenders that you are ‘high risk’, and so you may not secure a loan. A score between 661 and 780 is considered ‘good’, while a score over 781 is considered ‘excellent’.
Before you take out a personal loan, take a look at your financial situation. Are you in a good place? Have you got a good credit score? If the answer to these questions is ‘yes’, then a short-term loan might be good for you. If you have poor credit or you are consistently making late payments on existing debts, it might not be suited for you.
2. Compare loan options and find the right provider
There are many different types of loans out there. First-time borrowers will want to compare the different loan types to find the best for their needs. These are as follows:
- Personal loans or unsecured loans. These are used to borrow small amounts of money (up to R8000) and can help you spread the cost of a large purchase.
- Payday loans. These loans are used to borrow a small amount of money over a short time, but can often have higher interest rates.
- Secured loans. These loans use assets as collateral, which lowers the risk for lenders but can mean that you lose the asset if you can’t keep up with payments. These are used for large loan amounts.
- Guarantor loans. A guarantor is someone who promises to make repayments if for any reason you cannot. These loans are considered riskier for both the guarantor and the borrower.
It’s simple to borrow money with MyMulah:
- Borrow up to R8000 with up to 3 months to repay
- Apply online in just a few minutes
- No hidden fees
3. Borrow the right amount for your needs
It can be tempting to borrow a larger sum than you need to give yourself that extra spending money. However, this then means having to pay back more and increases the risk of you falling behind on payments.
Carefully consider the amount of money that you need to borrow and whether you can comfortably afford the monthly payments. If you have a loan amount suited to your needs and you feel that you can make the repayments, then you should feel confident in proceeding.
4. Understand the rates, charges, repayment terms, and terms and conditions
Different payday lenders offer different rates, charges, and terms and conditions. It is important to know what you are signing up for when you are financial planning as a first-time borrower. Here are the details of MyMulah’s short-term loans:
Read about MyMulah’s interest, fees and charges
5. Plan your loan repayments carefully
You may want to pay your loan back as quickly as possible, but you also need to consider whether you are giving yourself a reasonable timeline. Look at your finances and factor in whether the loan payment would push your finances over the edge. If the answer is yes, you may need to think about adjusting your plan.
It is important for all borrowers, and not just first-time borrowers, to ensure they have the funds to pay back their loan. If for any reason you cannot, contact MyMulah. Our ultimate aim is to obtain a mutually satisfactory agreement to both parties to settle the loan.
Get payday loans help from MyMulah
At MyMulah, we provide payday loans tips and tricks to our customers to help you with your financial planning. We aim to give our customers the best experience when borrowing from us, working with you to achieve this.
Our financial planning tips for first-time borrowers will help you stay on track with payments and maintain a good credit score. If you have any questions about first-time loans or how best to make repayments, contact the team! We are here to help.