Factors to Consider while applying for a Personal Loan |
Posted: December 1, 2020 |
With the increasing importance of personal loans, you are getting one email each day about an instant loan approval offer or for a pre-approved loan. Before filing a loan application, you are required to consider a certain factor, as it will help you in getting the best loan offers: Personal loan interest rates: Never fall on for lower-personal loan interest rates. Always read properly whether the loan is offered on reducing the interest rate or flat-interest rate. All those lenders who are offering you a flat interest rate may offer you a lower rate, but it does not mean that you are paying less. It's better to go with the option of reducing the interest rate. It means that the interest is charged on the outstanding balance. Give priority to your needs always over your loan eligibility If you are required with 3 Lacs to meet short term financial requirement, then file the loan application for that only. Some lenders push you to get a loan as per the eligibility amount. For instance, if your eligibility is 5 Lacs, the lenders ask you to apply loan for the same amount. There is no need to pay interest for extra 2 Lakhs when you do not need that money. Borrow only according to your financial requirement. Do this, will reduce your EMIs. Always shop for better interest-rate offers Never decide by checking the loan offer of one lender, always shop for better interest-rates. Do not file multiple loan applications to check the interest rates, it will increase the number of hard inquiries in your credit report. Online every lender has displayed the list of interest rates offered on Personal loan, you can compare there also, or you can even call the customer care of each lender to know about the same. Know your Credit Score before applying for a Personal loan Credit institutions and banks always evaluate your credit score at the time of sanctioning the loans. If you are having a low credit score, there are chances of loan rejection, or maybe are being offered a high-interest rate personal loan. If you are planning to file a loan application, always check your credit score first. Any score which is 750, or above is considered a good credit score. Avoid Add-on offers It usually happens when any of the financial institution give you the Personal loan offers, they also pitch you for add-on offers like accidental insurance plan, you need to understand that it will be added along with your EMIs. Simply say NO. As if paying high interest on loan was not enough, you have to pay interest on insurance premium too. Access all the cost Whenever you apply for a personal loan, apart from interest-rate, there are certain other charges also which you need to consider like prepayment fee, processing fee, and late payment fee. Access all the loan costs properly to get a clear picture of what will be your monthly EMIs. Following the above points will help you in choosing a lender that will offer you the best personal loans that fits well according to your financial requirements.
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