Dos and Don’ts While Taking Personal Loans
At times, you might face difficulties making a one-time payment for weddings, house renovations, gadgets, your child’s school or college fees, and more. Here is some good news. You can get a personal loan to fund these expenses. Before you apply for a personal loan online, it is necessary to consider the dos and don’ts that help prevent any risks or future disappointments.
Take a look at the following dos and don’ts while taking a personal loan.
|Dos of Personal Loan||Don’ts of Personal Loan|
|Consider the interest rates that different lenders offer.||Don’t ignore your CIBIL (credit) score.|
|Check the eligibility criteria.||Don’t apply with an unauthorizing lender.|
|Plan a repayment strategy.||Don’t borrow more than you can afford to repay.|
|Choose the loan tenure that suits you.||Don’t apply to too many lenders.|
|Beware of the additional charges.||Don’t share your password or pin with anyone.|
Read more to understand these dos and don’ts in detail.
Dos of a Personal Loan
- Consider the interest rates that different lenders offer
You pay the loan amount plus some amount of interest when it comes to repayment of the personal loan. Different lenders offer different interest rates on a personal loan online. The interest rates usually vary between 11% and 28%. Although the EMIs seem easy to pay, the interest amount may pile up throughout a loan tenure of 4-5 years. It is necessary to check the interest rates of different lenders and choose the one that is right for you.
- Check the eligibility criteria
There are different eligibility criteria for different loans, and they require different documents. The eligibility criteria for personal loans entail
- employment type,
- annual income,
- current financial obligations,
- credit score, etc.
Before applying for a personal loan online, read about the eligibility criteria and the documents required for a personal loan. Doing so will keep you up to date on the kinds of loans you are eligible for. It also reduces the chances of being rejected for a loan and maintains a good credit score.
- Plan a repayment strategy
Taking a loan has now become very easy, as many lenders are available in the market. Applying for a personal loan online without a repayment plan can become a financial burden. To avoid this, calculate your monthly EMIs and make a plan. You can use various EMI calculators available online.
- Choose the loan tenure that suits you
The lenders usually offer a loan tenure of 1 to 5 years. To make the EMI look easy and affordable, the lenders insist you take up the longest loan tenure. This will be of no benefit to you, as the longer the loan tenure, the higher the interest. Always choose the loan tenure according to your income and repayment plan.
- Beware of the additional charges
Even though a personal loan is the best way to get the money you need, you shouldn’t apply for one in a hurry. Always choose a suitable lender and read their terms and conditions that disclose the additional fees in advance. Doing this will save you from future surprises of extra expenses.
Don’ts of Personal Loan
- Don’t ignore your CIBIL (credit) score
A CIBIL score shows your creditworthiness or credit score. A good CIBIL score ensures that you get the personal loan you apply for. The CIBIL score for a personal loan is 750 or above, depending on the lender. Don’t ignore your credit score to get a personal loan at the lowest interest rate. The higher the CIBIL score, the higher the chances of taking advantage of the lowest interest rate. Check your CIBIL score from past loans and seek the one that matches your score.
- Don’t apply with an unauthorised lender
There are too many lenders claiming to offer easy EMIs, low-interest rates, and minimum eligibility criteria. To avoid disappointment and financial loss, always apply for a personal loan online with a registered lender or bank.
- Don’t borrow more than you can afford to repay
A personal loan does not need any security or collateral. Your sources of income are the foundation of the personal loan. Do not apply for a personal loan online that exceeds your repayment capabilities. Always keep a tab on your fixed and variable expenses, including current dues, monthly expenses, etc.
- Don’t apply with many lenders
When you apply for a personal loan online with many lenders, your credit score might get affected because of too many inquiries in a short period. There are chances that some lenders may even reject your loan due to poor credit scores. Thus, it is wise to apply only to those lenders whose eligibility criteria match yours.
- Don’t share your password or pin with anyone
During the personal loan application process, many inquiries happen via phone or email. Registered lenders only ask for reliable information. It should be kept in mind that sharing your password or PIN with an unknown person is unnecessary and carries the risk of losing important information or data.
Summary: Consider Dos and Don’ts to Avoid Risks
A personal loan is an easy-to-borrow loan that requires minimal documentation. Before you apply for a personal loan online, it is important to consider the dos and don’ts to avoid any potential risks. Always apply with a registered lender who offers the best interest rate according to your credit score. Consider these dos and don’ts the next time you apply for a personal loan online.
Are you looking for a personal loan?
If you are someone looking for a loan that covers your bills, be it a wedding, a gadget, renovations, your child’s school fees, and more, a personal loan is a one-stop solution. Apply for a personal loan online or call 18002666444 to learn more.
Also Read: Personal Loan: How Can You Make Use Of An Online EMI Calculator
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