Taking a personal loan is a simpler and convenient way to borrow money. Being an unsecured finance mode, it doesn’t require you to pledge assets to qualify for loan approval. You can enjoy fully personalised offerings that can be easily availed within a short span. Online applications and disbursals also assure that the money is available to you to meet any impending exigencies. Personal loans can be utilised to pay for a wedding, consolidate credit card debt or fund a home improvement project.
But there are several intricacies to taking a loan that isn’t immediately obvious, like ensuring that there are zero errors in your credit reports or choosing the right loan tenure.
Here are some helpful dos and don’ts when applying for a personal loan:
Do’s Before Taking a Personal Loan
- Check the Lender’s Eligibility Criteria
Before applying for Fullerton India personal loans, you should first verify the eligibility criteria specific to the lender. Failing to do so can make you overlook the basic requirements needed to be eligible for the loan. It can result in rejections as lenders are often quite strict with their policies. Rejection in this instance can adversely affect your CIBIL score, so it is necessary to check the terms. Some of the standard criteria are based on your employment status, age, and monthly income.
- Figure Out the Loan Amount That you Need
It is essential to know exactly the amount you need before applying for a personal loan. It is suggested to borrow only as much as you truly need, even if you are eligible for a higher sanction.
- Shop for the Lowest Interest Rates
Before you settle on a personal loan, make sure to look around and compare interest rates offered by various lenders. Even a little difference in interest rates can save you a lot over the tenure of your loan. The interest rates for Fullerton India personal loans are quite affordable, starting at 11.99% per annum. You can easily avail a personal loan from them and repay it through affordable EMIs.
- Read the Fine Print
It is vital to thoroughly read the fine print, once you make up your mind about a personal loan. Remember to read up on crucial details such as maximum loan tenure, required repayment schedule, and how long it might take to get loan approval. Thus, it is in your best interest to thoroughly read the fine print before applying for the loan.
- Fetch your Credit Report before Applying for the Loan
Your creditworthiness is monitored through the credit report while evaluating your loan application. Usually, borrowers with a CIBIL score of 750 and above have greater loan approval chances at a lower interest rate than those with a lower CIBIL score. So, it’s essential to maintain a good credit score for easy approvals. You can even fetch your credit report before making the loan application to take corrective measures to improve your credit score. It will also help you recognise any incorrect information or casual errors.
- Opt for a Loan Tenure Based on your Repayment Capacity
Loan tenure plays a key role in determining your total amount for monthly installments. Ideally, selection for loan tenure must be based on your repayment capability. Remember, shorter loan tenures result in higher EMIs and lower interest costs and vice versa. Therefore, you should opt for a shorter loan tenure only if you can pay your EMIs on time without stressing over your monthly budget. In case you cannot, select a longer loan tenure for lower EMIs.
Don’ts Before Taking a Personal Loan
- Don’t use Personal Loans for non-essential Spending
While personal loans are popular because of the associated perks and comparatively low-interest rates, don’t just avail one out because you can. Avoid getting a personal loan without any urgent requirements or to fund your excesses. Also, try to get a sense of your financial habits and spending pattern before applying for a personal loan. While it can help you meet your needs during a financial emergency, it requires a monetary commitment and the discipline of regular repayments.
- Don’t Apply without Calculating your Required Credit Amount
It is essential to consider the impending expenses and calculate the required loan amount before applying for a personal loan. It helps you avoid borrowing more than needed and hence, pile up on your monthly financial stress.
- Don’t Skip Loan Repayments
If you skip loan repayments, it will certainly have an adverse effect on your credit score. With a low credit score, it might become complicated to avail other crucial loans in the future. Before availing a personal loan, use a personal loan calculator to understand your expected monthly repayment cycle. Analyse if you will be able to afford these repayments every month. If not, consider lengthening your loan tenure or decreasing your loan amount.
Keeping in mind the pointers mentioned above will help you successfully apply and procure a personal loan from a reliable lender in the market and further enhance your creditworthiness.