A personal loan is one of the best solutions for any short-term financial crisis or emergency. The loan is quite handy and can manage both planned and unplanned expenses. The digitalization and the introduction of technology in personal loan processing have speeded up the entire process and as a result, you can now apply for a personal loan online and get approved for the same in less than an hour. Sounds too good to be true, right? But, this is true. Fast approval, quick disbursement and many more factors like this make personal loans one of the most wanted financial products for the majority. Well, despite several benefits, there are certain things about the personal loan that remains untold. But, don’t be afraid, we are here to give you some tips on a personal loan that no one will tell you.
Take a Personal Loan Only When it’s Necessary
This is a fact that the interest rate charged for a personal loan is comparatively higher than the other loans. So, keeping this in mind one should always apply for a personal loan only when it’s necessary. It is also important to understand that while a loan helps you pay for your short-term goals, you will be repaying it for the next few years without any fail. Hence, it becomes important to ensure that you will be able to make the monthly payments within your income.
Be Careful of Additional Charges
Before you decide to go with a particular bank for your personal loan, you need to enquire about the additional charges other than the interest rate. Processing fees, GST, verification charges, Penalty on late payment of EMIs (defaults), Penalty for prepayment or foreclosure of loan, are some of those.
So you need to make sure that you take into consideration other factors too as these charges can club and form a bigger amount.
Go for a Shorter Loan Tenure
There are loan providers/banks that provide personal loans for a longer repayment period with lower EMI. This is quite tempting for many as they think they are going to save on the EMIs. But, it is worth noting as in a longer tenure you end up paying more on the component.
Having a good CIBIL score can help you.
This is not known to everyone, but having a good CIBIL Score can help you get the best deals on your personal loan application. Having a good CIBIL score gives you an edge to negotiate with the lender for the best interest rate.
Research Thoroughly Before Applying
There are several personal loan providers in the market, and each of them offers the same product at a different interest rate. To get the best offer on your personal loan it is essential to go do thorough research before selecting your lender. So, before applying ensure that you have compared features such as interest rates, loan tenure, processing fees, etc. and then pick a loan provider that matches your requirements.
So, if you are planning to go for a personal loan, it is important to consider these factors as they will not only help you to get the best deals on your personal loan but will keep you safe from future troubles.