4 Tips On Being Responsible With Your Personal Loan
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A personal loan can go a long way towards helping you achieve your life goals and ambitions. These days, it is becoming easier and quicker to apply for a personal loan online. However, just like any other financial tool, you need to practise maximum financial responsibility when taking out and servicing a personal loan.

Here are four tips that you can make use of in order to manage your personal loan in a responsible manner.

1) Get A Loan For The Right Reasons

Unlike home loans or loans for your car, personal loans do not have to be used for a specific, bank-approved reason. Therefore, it is up to you to determine whether you have a good reason for your personal loan or not. Common reasons for applying for personal loans include having to pay for sudden emergencies or fulfilling your necessary commitments while you are in a financial tight spot.

Some people also take out personal loans as a way to cover the down payment for a house or wedding upfront and pay it back over a longer period of time. You can also consider getting a personal loan to start a side business business without having to apply for a business loan. Not to forget personal loans like the Standard Chartered CashOne Debt Consolidation Plan which are used solely for the purpose of debt consolidation, where you roll all your existing loans and credit card debt into one new financial obligation.

2) Do Your Research

After evaluating your reason for getting a personal loan, now it is time to do the research on the personal loans in the market. And no, this is not just about which loan offers you the lowest interest rate as there are various other factors to consider. Overall, you should take into account the loan tenure, personal loan interest rates, additional fees and charges, and application requirements of each loan that you are considering; find out more about how to choose a personal loan here.

If you are in need of quick cash, you can also look into personal loans that offer an instant approval – such as the RHB Easy-Pinjaman Express or Citibank Personal Loan. And if you’re looking for a debt consolidation loan, such as the Alliance Bank CashFirst Personal Loan, you should check that your new consolidation loan has better rates than what you were paying on your various loans and debts previously.

3) Create A Budget

Creating a personal spending budget is a good financial habit to have on a normal basis, but it becomes extremely important when you have loans to pay off. Sit down and figure out how much money you have coming in and where it goes each month. Think about how much money you will need to borrow and how much you can comfortably pay back. Then, you will have a better idea of what size of loan you need and how to pay it back responsibly.

Make sure to be practical when crafting a budget and remember to leave room for emergencies. The best budget is not one that is stringent, but one that you know you can adhere to – if your budget is too unrealistic, you may end up abandoning it before long.

4) Make Your Payments On Time

If you miss a personal loan repayment, the banks will implement a late payment charge – which is usually about 1%p.a. of your current outstanding amount, calculated on a daily basis. As you can imagine, the penalty charges can quickly start building up, so the key to staying on top of your personal loan is to make your monthly repayments on time. You can do this by setting up automatic payments with your bank, or by setting a reminder on your phone so that you will not forget.

Making your personal loan repayments on time can also offer you another advantage – it can help improve your credit score. This can help you with your financial standing overall and also with any future loan applications. In fact, if you have a great credit score and a long-term relationship with your bank, you could even negotiate for better terms and lower interest rates!


At the end of the day, financial responsibility is an important skill to have and implement in your adult life. Therefore, when you are making a financial decision such as taking out a personal loan, make sure to exercise your best judgement and behave sensibly both now and in the long run.

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