Apply for a personal loan online? Do’s and Don’ts
A personal loan is the most practical option to meet urgent or planned financial needs. There are no restrictions on the use of credit. A personal loan allows you to make major purchases, meet emergency cash shortages and household expenses, consolidate debt, make necessary home renovations, and more. Personal loans have continued to grow at a rapid pace over the past decade. The value of these unsecured personal loans increased by 9.60% in March 2022 compared to the same period of the previous year.
Fullerton India instant personal loans are preferred as they offer competitive interest rates and the loan amount is disbursed quickly if the applicant fulfills all the eligibility parameters.
Significant advantages of obtaining a personal loan:
- Personal loans do not require collateral.
- Personal loans can arrange vacations and cover all your airfare, travel and accommodation costs.
- These are instant loans that disburse credit in a short time.
- Get credit against the most basic documentation.
- Personal loan interest rates can be adjusted with a good CIBIL score.
There are certain do’s and don’ts that an applicant should know before applying for a loan. Let’s see what it is.
To apply for a personal loan:
Maintain a good credit rating
Credit history and score are an integral part of the loan process. It shows the creditworthiness of a borrower, which is important for a lender because it gives a loan without collateral. People with a high credit score of 750+ are more likely to get a personal loan.
Look beyond interest rates; Make an informed decision
This is an area overlooked by most borrowers. To make an informed decision, you need to read the fine print of the terms and conditions. It includes the repayment schedule, processing fees, prepayment fees/penalties, personal loan interest rates, and interest calculation method. These small details can lead to an increase in the cost of the loan for overdue IMEs. Research well and evaluate to make a final decision to get an easy personal loan or Aadhaar.
Assess your needs diligently
Despite the ease of obtaining personal loans, you should use them with care. Assess what your needs and wants are and how much you need. Evaluate IMEs you can afford to repay on time. Avoid buying unnecessary items that you want and then struggling to repay the loan.
Check the credibility of the lender
Apply for a loan from a reputable source with a reliable loan history. Validating the credibility of the lender is crucial. Make sure the lender is verified by the Reserve Bank of India (RBI).
Use an EMI Calculator to Make a Reasonable Financial Backup
A borrower must use a personal loan EMI calculator. It helps in determining the appropriate personal loan amount based on the repayment capabilities. It helps in choosing the right NDEs. A borrower should consider their current salary, review their monthly obligations, potential increases in income and expenses, and then develop a repayment strategy. If you expect a short-term pay rise, you can pay off the loan sooner and get out of debt faster.
Choose a reasonable repayment term
A longer term loan may increase the interest rate and therefore the overall cost of borrowing. With a shorter term loan, one can decrease the EMI loan. When you have extra funds, reduce your debt burden. If it is not a burden for you, choose an appropriate loan term that can meet your financial needs.
What you need to know
Say “no” to unofficial sources
Generally, most borrowers prefer instant online loans. You should be careful of unverified loan offers. To avoid falling victim to cyber pull or scammers, do not welcome any unverified loan offers in your mail or SMS asking for confidential information, like bank account details, PIN, etc. Beware of offers guaranteeing a personal loan without proof of income or Check CIBIL.
Avoid multiple loans at the same time
A borrower should not apply for multiple loans at the same time. This can lead to a huge financial burden which increases the risks of late EMIs and badly affects the credit rating. Instead, you can cover all your financial needs in one loan and further manage your finances accordingly.
NDEs are not to be missed
Be sure to pay all EMI loans on time. Missed IMEs increase interest on amounts owed and result in huge fines. It will also lower your credit score. You may not be able to get an instant loan in the future.
Check your credit score beforehand
A credit rating is a primary factor that a lender considers when approving a loan. A borrower must meet all the eligibility criteria to obtain a loan sanction. To avoid any position of a denied loan application, check your credit score. It should be above 750 on a scale of 300 to 900. A rejected application also impacts your credit score.
So, be aware of these do’s and don’ts to get the safest deal possible for your personal loan.