In today’s fast-paced lifestyle, situations, where immediate cash is required for an emergency or unexpected expenditure, is common. Instant personal loans can be a good way to meet such money requirements. This is because a personal loan comes with no end-usage restriction, and you have the provision of using it to fund diverse expenses as per you.
With this loan, you can consolidate your debt, you can also use one to get the funds necessary to pay for a sudden expense. This can also help you to deal with a medical emergency, pay for a large household expense, or it can be a solution to your temporary personal cash-flow issue.
Since the loan is quite helpful and comes collateral-free, it becomes important to consider the Do’s & Don’ts of the loan, to avoid any hardship in the future.
Do’s for an Instant Personal Loan
Compare for the rate of interest offered by the lender
Personal loans generally come at a higher rate, and the EMIs for the loan includes both principal and interest amount, thus, it becomes important to compare the personal loan interest rates offered by your lender. You can use the internet and can compare your lender’s offerings with other lenders in the market. Use a personal loan EMI calculator and compare it for the total cost of borrowing. Go with the lender who has a minimum cost of borrowing.
Check the personal loan eligibility criteria
Personal loans mostly come with easy-to-meet loan eligibility criteria which makes it convenient for the people to opt for it. With most of the lenders, the commonly defined eligibility criteria depend on age, income and employment stability which altogether define your loan repayment capacity.
Check for the paperwork & documents required.
Paperwork required when applying for a personal loan is minimal, as it mostly requires only a few essential documents. However, with the involvement of technology in the loan processing system, the online personal loan requires no paperwork to be done. The documents required are said to be uploaded online on their portal while filling the loan application form itself. The documents required include- documents showing your proof for identity, address, income. So, while availing a personal loan one should go with a lender who requires minimal of the documents and paperwork.
Check the cost Of the loan Using an EMI Calculator
Settle for a lender and a loan amount only after using a personal loan EMI calculator. Provide information like – chosen loan tenor, rate of interest offered, and the credit amount. It helps you assess and choose the amount that best suits your repayment capability.
Check for your affordability before you apply
Check for your current monthly obligations and make sure that it is between 30-50%. If you have already ongoing loans on you – be wise and choose for a loan amount that can be repaid easily. Make sure that the new obligation will not affect your monthly budget. If you are sure about all this you can move ahead and avail the loan.
Don’ts for an Instant Personal Loan
Don’t approach too many lenders
Shopping around for the lowest rate can also prove counterproductive sometimes. Every time you approach a lender for a loan, the lender checks for credit score to know his/her creditworthiness. So, if you approach too many lenders, you might be seen as a credit hungry person and your credit score may get affected. This is why it is suggested not to apply for a loan with many lenders.
Don’t ignore the fine prints.
The fine prints of your loan contain all the information regarding your loan. The terms & conditions for your approved loan and many other details. So, it becomes quite important to read and understand the fine prints properly. Even if you are not able to understand a single clause properly, ask your lender about it. If required take help from an expert or financial advisor. Sign the agreement only and only if you are clear with the fine prints.
A personal loan can help you in any financial emergencies that can otherwise spell disaster.
Follow the above dos and don’ts when applying for a personal loan in India and avail the benefits.