In spite of being the best-selling financial product and the most famous one, there are certain things you should not ignore while taking a personal loan. Borrowing is a serious thing and one should always take this decision wisely. In our previous blogs, we have always kept you well informed about the personal loans, and in this section, we will be discussing the 5 things that you should not ignore while taking a personal loan.
5 Things You Should Not Ignore while taking a Personal Loan
Don’t Ignore the Interest Rate
Striking the first deal which is coming across you is never a good idea. Before you lock a deal, it is important to research in the market. No doubt that some offers are so tempting that it becomes difficult to keep a hold on that. But apart from tempting offers, interest rate plays a vital role, and when it is about a personal loan it becomes even more important as the interest rate for this is always high as compared to other loans.
Go through the portal of all the lenders and check for the interest rate at which they are offering the loan. Choose the one who is offering the lowest interest rate along with certain features to suit your requirements.
Going Easy on the Loan Tenure
The tenure period of a personal loan also plays an important role, as it contributes to the total cost of your borrowing. For a personal loan, it is highly recommended to keep the tenure short as if you go for a long tenure, it will end up by paying more on the interest.
By opting for a long tenure may look tempting but in the long run, it will consume more money. This will end up paying more than the principal amount what you borrowed.
Don’t Avoid the Processing fees and other Charges involved
Processing fee, service charges, and GST are also a part of personal loan processing. One needs to pay these charges at the time of their loan processing. Well, if you don’t have enough money, then, in that case, the total money equivalent will be deducted from the loan amount which is going to be disbursed to you.
Hence, it is equally important to check and compare for these charges and then apply with a lender who is charging the least.
Checking your Credit Score
Your credit score is one of the major factors which decides your creditworthiness. Your credit score is the one which denotes your previous credits and your repayment history. A good credit score reflects a good credit history which means you were timely with your EMIs and payments. Whereas a low credit score denotes a bad credit history and it implies that the applicant was not timely with his/her payments.
This is important to check as the applicant with a good credit score seems to be more trustworthy as compared to the one who has a low credit score. Hence they lend easily to one with a good credit history.
Loan application of an applicant with a low CIBIL is more likely to get rejected.
Checking the Terms & Condition
Terms and conditions are part of your loan which you can’t afford to avoid. The terms and conditions are mentioned in the loan agreement which needs to be signed by you. Most of the people take it as a formality to get the loan, and they sign it without reading the fine print.
Signing the loan agreement without understanding the fine print can lead to serious issues in the future.
So, before you sign yours, ready every line carefully, in case you are not able to understand then go to a professional such as a lawyer to take help. Sign only when you are confident that you know all terms and conditions well.
Always check for these things before you apply for a personal loan, checking for these can make your borrowing much easier and your tenure much comfortable.