Personal Loan for Emergencies
Having proper knowledge of personal loan before applying for it not only improves your chances of getting approved for it but also protects you from future risks. Though personal loans are simple and widely available, there are many things related to it which we ignore while applying.
When you apply for a personal loan, it is very important to consider a few things before you make your final decision. These things include your credit score, the interest rate at which your personal loan will be approved, fees & charges related to it and so on. Taking care of these things ensures your personal loan application approval and getting the best personal loan at the lowest interest rate. Ignoring these can lead to big mistakes such as selecting a wrong lender and wrong plan.
Here are some important things which you need to keep in mind before you apply for a personal loan with any lender.
Calculate your Personal Loan EMI
Personal loans are unsecured loans and hence the interest charged for it is higher than other loans. The online personal loan starts at the lowest interest rate of 10.35% and can go up to 30% per annum depending on your profile.
The interest rate is one of the major factors which decide your EMI. And to have an approximate idea of your EMI, you need to use a personal loan EMI calculator. This will provide you with an idea of your estimated EMI. This will further help you to decide whether to have a personal loan of that much amount or not. Calculating your EMI will also help you to plan your budget and finances accordingly.
For Example, You take a personal loan of ₹ 6 lakh at an interest rate of 17% per annum for a time period of 4-years Suppose the EMI for this loan is 10000 which you get to know through the EMI calculator. Then you can analyse whether you can pay this much per month or not. If not then you can reduce your loan amount or can apply for longer tenure say 5 years.
So, knowing your EMI before you apply for this loan can make things easier for you. As you can know the total cost of your borrowing and can plan your finances according to it.
Compare the Personal Loan Interest Rates in The Market
Different banks offer different rates for personal loans and guarantee that they are offering personal loans at the lowest rates. Hence you need to analyze the rates offered by various money lenders. You can go through the portals of the different lenders and can check for the rates. To compare different lenders at one platform you can visit Finance Buddha where you can compare different banks for the rates and can apply form there only.
This empowers you to choose the best personal loan offers at minimal financing cost.
Borrow What You Need
When you are eligible for a personal loan, lenders offer you high-esteem advances and that too at appealing financing costs.
However, you need not lose control seeing that you can get more money. Rather, you should just get that much money which you require. At the point of time when you are being offered more loan amount, it will be tempting to you. However, repaying a huge amount can be a pain for you. So first, analyse your needs to set the budget before you apply for a personal loan.
Check Your CIBIL Score Before you Apply
Banks and other lenders consider your CIBIL score while approving any loan to you. A low CIBIL rating can lead to rejection of your loan application. In case when your loan application is approved with a low CIBIL the interest rate charged for it will be comparatively high. So, try to check your CIBIL before you apply for the loan. Doing this will give you an idea of whether your loan application will be approved or not.
In case your CIBIL is low, try to take measures to boost it and then apply for the loan. (Using a credit card properly and taking a small amount of personal loan for a short term can boost your credit score.
There are different costs involved in your personal loan, these costs are- processing fees, GST, etc. All these together contribute to your total borrowing cost, so don’t forget to add them to your cost.
Apart from these costs, you should also know the prepayment charges and penalties charges involved in the case of late payment.
Foreclosure is also one of the important things which you should consider before you apply for a personal loan. And yet another thing which you need to consider is the balance transfer facility. Try always to go with such a lender who is offering you these facilities, as these may not affect you at the present but in the future, it is going to affect you for sure.
It’s generally easy to get approved for an instant cash loan or for an instant personal loan. The loan is quick and disbursed within 24 hours. But in terms of getting approved for it is important to know its eligibility criteria and other things related to it.