Personal loans are a great option for those looking to make a big financial decision in their life. It could be buying a new car, planning a wedding, going on a vacation abroad, paying for higher studies, or getting a new home. Personal loans offer secured debt consolidation as they cover tons of financial needs. While taking out a personal loan is pretty straightforward, you should consider some key aspects before going for one.  Things to Consider Before Taking Out a Personal Loan from a Bangladeshi Bank  Purpose of the Loan  Personal loans are mostly taken as a form of investment source. It can be debt consolidation or a major investment for future benefit. Regardless, a loan means incurring a liability until it is paid off. It is important to properly assess whether taking the loan is a feasible decision or not.  It is also important to consider alternative funding sources like personal savings, emergency funds, or borrowing from family.  Interest Rate One of the prime things to consider is the interest rate accrued to the loan capital. Currently, Bangladesh Bank has a regulation in place that outlines the upper limit that can be charged by the banks. The Bangladesh Bank interest rate regulation can be checked from the lending rate of scheduled banks (https://www.bb.org.bd/en/index.php/financialactivity/interestlending). Read more: Top 10 Strongest Currencies in the World as of May 2024 Additionally, a borrower can use websites like aamartaka.com to compare the rates among banks, check eligibility criteria, and even apply through their designated channels. Understand the Eligibility Criteria  The first thing to consider while applying for a personal loan is to understand the eligibility criteria. Personal loans can come in both secured and unsecured options. Granted that the unsecured options will incur a higher interest rate.  However, most banks require a set of eligibility criteria for one to apply for a loan. For example, the valuation of collateral against the loan or the liquidity level of the applicant. Other aspects like personal history verification, job verification, income, and salary credit account can also be the eligibility criteria depending on the lender. Another key aspect is the history of bankruptcy or loan default which might disqualify a person from applying for a personal loan.  Have a Good Credit Rating  A credit history is one of the key determinants of loan disbursement abroad. One can’t even apply for a credit card without a stable credit rating, let alone a personal loan. Credit rating determines the creditworthiness of an individual, that is how likely they are to repay a loan based on previous credit history.  Read more: How to Buy Bangladesh Government Treasury Bond: Everything You Need to Know There are several credit scoring systems globally like FICO score and VantageScore. However, in the case of Bangladesh, the banks and NBFIs do not follow a set credit score while approving loans. Alternative credit scoring like asset ownership, utility payments, device data, and rental payments are taken into consideration. It is mostly because a large portion of the demographic is unbanked or underbanked to make credit scoring the sole determinant for loan approval.