Generally, personal loans are taken if any applicant is planning to travel abroad, meet personal expenses or planning for marriage in near future. If you are planning to apply for a personal loan anytime soon, then there are certain points that you should be well aware of before applying for the same.
Before applying for a loan, it is important to have a clear understanding of terms like credit score, loan interest rate and surcharges. While you examine these factors, you can avoid making petty mistakes that may affect you. Here are a few important things to keep in mind while applying for a personal loan.
Ensure a Good Credit History
A credit score, also known as the CIBIL score, reflects your creditworthiness on the basis of your previous credit history in terms of repayment. If you have never taken loan before, you can still maintain a good credit history provided you have been paying your existing credit card bills on time. Ideally, the CIBIL score ranges from 300 to 900 and any score above 750 is considered to be ideal.
Check the Interest Rates before Applying
There may be plenty of lucrative offers by financial institutions, which offer you pre-approved personal loans. Before opting for the same just because the process is easier, it is best to check the loan rates offered by other institutions. To ease your pain, plenty of online portals help you compare the rates easily and choose accordingly.
Examine All the Costs Involved
When applying for any loan, there are plenty of costs involved, which include processing fees, prepayment fees, late payment fees etc. Therefore, do go through the cost involved before finalizing any loan. It will help you plan your finances in a better way.
Plan Your Loan Amount According to the Expenses Incurred
Do not go for a personal loan just like that. If you have a big event coming up or you require money urgently, then only go for it. Make a list of the things that you require and accordingly apply for a loan, which can help you fulfil the current needs.
Evaluate Your Capability to Pay EMIs on Time
You may have plenty of credit cards and loan offers, but at no point in time should you famish all the credit limits and additionally apply for a loan. Before applying, check the minimum amount you can spare to repay the loan in minimum instalments. If your tenure period is more, then you may end up paying more than required. Hence, plan accordingly.
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If you are looking for instant loan approvals to meet your urgent requirements, then you can look for financial institutions that provide flexible and hassle-free payment policy, which helps you manage your expenses with ease. If you have applied for loans before, do let us know about your experience with it in the comments section below!