5 things to Keep in Mind Before Getting a Personal Loan
Life is unpredictable, and you seldom understand when you might require some money to aid your expenses. A personal loan comes into the picture to rescue from the financial shortage and emergency situations.
A personal loan is an unsecured and the most popular one used for sudden financial needs that may arise from nowhere in day-to-day life. It can be used for various purposes such as marriage, education, electronic gadgets and many more.
Moreover, with online personal loan apps, seamless features like flexible repayment options and zero collateral, providing instant loans has become easy and quick. So, you can avail of an online personal loan within a few minutes. But before applying for a personal loan, you should know a few things about getting an instant loan.
Here are the 5 aspects you should keep in mind to take the right decision before getting a personal loan:
- Compare the Interest rate with other players in the market
Interest rates vary from lender to lender and comparing the rate of interest offered by various lenders can get you the lowest interest rate. You get the option to calculate your interest rate offered by different lenders efficiently through the digital platform. Some may levy high-interest rates with high processing fees, and some may provide low-interest rates. So, by comparing the interest rate with other competitors in the market, you can avail the best and lowest interest rates for affordable EMIs.
- Evaluate your EMI
With digital loan platforms, you can now check your monthly equated instalment with the help of an in-built loan EMI calculator developed on the instant personal loan app. A thumb rule for getting a personal loan is that your EMI should be 10% less than your monthly income. But on the other hand, if the EMI is higher, it may impact your daily expenses. Thus, before availing of a personal loan, you should evaluate your EMI with the help of a loan EMI calculator.
- Choose the right loan amount
Before availing of a loan, you should opt for the right amount. You should avoid taking a loan if it is unnecessary. Make a list of all your requirements and then prioritize an essential requirement you want to avail finances for. Because when you are applying for a personal loan for education, medical expenses, wedding or vacation. You should apply for the loan amount required that is easy to repay without any burden.
- Maintain a good credit score
A good credit score indicates your creditworthiness based on your repayment history. A minimum CIBIL score required to acquire a loan is mandatory in getting a personal loan. You can maintain your credit score by repaying your debts on time. However, delayed repayments will impact your credit history and lower it considerably. So always remember that your credit score should be no less than required. If lower, try to make sure to improve your credit score by repaying timely dues before applying for a personal loan.
- Check the repayment tenure.
Generally, personal loan tenure is flexible and less than other types of loan repayment. While taking a personal loan, it is advisable to keep the tenure shorter because the faster the repayment term, the lower the interest rate, though the EMI to be repaid would be slightly on the higher side. On the other hand, the longer the repayment tenure, the lesser the EMI, but the interest rate on the loan will increase.
So, keeping these 5 factors in mind before applying for an online personal loan can help you get a personal loan smoothly with simple eligibility criteria and paperless documentation.