Whether you want to organise a wedding, handle a medical emergency, renovate the house, or plan a vacation, personal loan can be used anywhere. The demand for personal loans has increased over the recent years because of the many benefits such as faster approval and no collateral, they offer. Though it might look easy to apply for a personal loan and get one instantly, there are some dos and don’ts of the game. Let’s look at them in detail.
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Dos for Getting Personal Loan
Check your Credit Report
The personal loan interest rate depends hugely on your credit score and credit history. In case you have an ongoing loan or had one in the past, and there’s no lag in EMI payment, the bank will assume that you will repay the EMI for the personal loan on time. Higher the credit score, lower the interest rate. Thus, it makes sense to check your credit report. There is a possibility you might find some discrepancy in the data and the error might affect your personal loan interest rate.
Look for Lowest Interest Rates
Before settling for a personal loans, you must shop around, take interest rate quotes, and compare them. Even a minor difference in the interest rate can save you thousands of rupees over the tenure of the loan.
Read the Fine Print
Another important thing to take care of is reading the fine print before you agree to take the personal loan. The document will have details like maximum loan tenure, repayment schedule, income cut-off criteria, approval time, processing fee etc. You must read every detail.
Pay Attention to Processing Fee
It is important that you are informed about the processing fee for the personal loans approval process. Some banks might offer you a low interest rate, but charge a high processing fee to make up for the loss. You should be well-informed about the fee.
Don’ts for Getting a Personal Loan
Never Accept the First Loan Offered
It is always advised to shop around before taking a loan. Almost every bank offers personal loans, but they might have a different interest rate, processing fee, and other terms and conditions. You must compare the banks on these factors before committing to one of the lenders.
Don’t Take Maximum Loan
Paying off a personal loans might seem easy and manageable initially, but it will become a headache over time. Therefore, it is advised not to take a maximum loan because chances are that you might not be able to afford it at a later stage. Overborrowing could be dangerous in the case of a personal loan.
Don’t Miss-out on Payments
Missing payments or late payments can affect your credit score. Also, it can become a problem in getting more loans or credit cards in the long run. To avoid missing out on payments, you can set automatic withdrawals or monthly reminders.
A personal loan is your saviour in difficult times. However, instead of just rushing into things, you must analyse the pros and cons to ensure that you can repay the loan without doing yourself more financial damage. If you are looking for a personal loan, you can get in touch with IndusInd Bank. You can easily apply for a personal loan online in a hassle-free way and get instant approval.