A financial emergency is the scariest thing as it comes unannounced. To cope with such crises, personal loans are quite famous and are getting instant hits due to its friendly features like flexible tenure, no collateral, and quick disbursal. If you are considering applying for an instant personal loan, you need to check out some dos and don’ts to enhance your chances of loan approval.
Things To Do For A Personal Loan
The following is a list of essential things that you should consider before applying for a personal loan.
Check the rate of interest
Personal loans generally come at a higher rate of interest. The EMIs include the principal and the payment interest. Thus, it is necessary to compare the personal loan interest rates offered by money lenders. You can use the EMI calculator for comparing the rate of interest and the actual payable EMI with different rates of interest. Choose the moneylender who is offering a minimum rate of interest.
Check out your eligibility
Personal loans generally come with user-friendly criteria which makes it even more convenient for emergencies. Most of the money lenders offer different eligibility factors which might depend on your age, your income, your employment stability, and your loan repayment capabilities. You must need to meet the parameters set by the lenders.
Personal loans required minimum paperwork while applying. You only need a few necessary documents like your ID proof, your address proof, your salary slips, your employment proof, and your age proof. In this tech-savvy era, you can easily upload your documents online for approval. Thus, you must consider all these documents for availing a personal loan.
Prefer loans with simple application procedures
The lengthy application process will make your application tedious, and you might also lose your interest in acquiring a personal loan. Thus, while selecting the lenders, ensure that you pick the money lender who offers a simple, quick, and user-friendly application process.
Check the approval turnaround time
Another thing to do while applying for the personal loan is the amount of time taken to verify your application and the disbursal loan. Generally, it could take a few days to a few weeks for the verification process, approval, and loan disbursal.
Verify the loan amount offered
You need to calculate the offered loan amount once you have decided to take a personal loan. You must need to consider your requirements, your repayment capabilities, and its utilization. However, there are no restrictions on the end-use of a personal loan as long as it is authentic and legal.
Things To Avoid While Taking A Personal Loan
Apart from the many essential things that you considered; these are the things that you should avoid while applying for a personal loan.
Don’t use without checking your CIBIL score
Your credit score shows your creditworthiness, and it ensures the moneylender about your repayment capacities. The minimum CIBIL score required for a personal loan is 650 and above. And you can apply for the amount of ₹ 25,00,000 along with the best personal loan terms and conditions on your financial deals.
Don’t apply without calculating your EMIs
Take into consideration the impending expenses and calculate the repayment loan amount before applying for a personal loan. Calculating your EMIs in advance helps you to reduce the chances of EMI failure. It also provides you with a good idea about your expenses, your savings, and your future financial planning.
Don’t’ overlook the fees
It is essential to read your loan agreement before signing the contract. You need to check out the hidden costs like the pre-payment of EMIs, the processing fees, taxes, and many others.
Don’t fail to plan for repayment
Before you apply for a loan, ensure that you consider your repayment capacities by considering your monthly salary, your savings, your previous debts, and your existing financial obligations. Not preparing yourself for the repayment might lead you to default on repayment, which will negatively affect your credit score and your future chances of getting a loan.
Don’t approach too many lenders
While searching for the lowest interest rate moneylenders, you may contact many lenders. When you approach a moneylender, he will check your credit score to know your credit history. So in case you approach too many lenders, you might be seen as a credit hungry person, and your credit score may get affected. Thus, you need to apply for a personal loan with a few lenders.
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