Getting a loan is a big step and it requires planning and investigation. To meet the shortage of funds, emergency savings do not always work, so there is a need to take a loan.
Whether to fulfil the wishes or to deal with any emergency, personal loans have emerged as a temporary measure. With the advent of digital revolution, online loans have also become easier. The number of such youth is increasing rapidly, who are taking a personal loan to improve their lifestyle.
Online lenders are also becoming famous due to better facilities. Personal loan is an unsecured loan, for which you do not have to mortgage anything. But if it is not managed properly, it can give more harm than good. Let us tell you some factors that you should take care of.
Review your finance
It may seem tempting to look at a personal loan, but if the payment is not made on time, your credit points will fall, which will make the situation worse for you. Prepare a monthly budget for income and expenses. You can calculate additional expenses like EMI through EMI calculator. In this, you just enter the loan amount, duration and interest rate. A raw data will be presented to you, which will help in making your monthly budget.
View credit score
While viewing the loan application, the lender first checks the customer’s credit score. Due to unsecured loans, the terms of personal loans are more stringent. Credit score shows the eligibility of the customer how beautifully he manages his finance. Based on the credit score, the lender decides if the customer will be able to pay on time. A customer with 800 credit score will get the loan easily at attractive interest rates.
Need not see merit while borrowing
Every day a pre-approved loan email will come in your email box. Do not get into these tempting rounds as this is the marketing strategy of the team. Apply only for the loan amount as low as possible. By taking more amount, EMI will also have to be paid more.
Negotiate for a better deal
The personal loan market has become very competitive over the years. All banks and NBFCs are providing personal loans at attractive rates. Do not get caught by the lender you meet first. Apart from the interest rates, you should know about the prepayment penalty of various lenders, interest / penalty on late payment, check bounce charges etc. Go with the one that gives you the best deal.
Ignore extra offers
While selling personal loans, banks try to give a plan like Accidental Insurance to the customer. Such additional offers will increase your EMI. Refuse such additional plans immediately. Insurance is just an example, but the lenders definitely give you such offers.
Read all the terms carefully
Lenders do not disclose all information. While signing the loan agreement, read all the conditions carefully. This includes hidden charges. If you did not pay attention to it, then you will have to pay more later. While finalizing the deal, be smart and think about future finance.
Everyone knows that due to unsecured loans, interest rates are higher in personal loans. You can take help of your friends or family, or you can also sell some property so that a solution can be found for a short time. If you get money from family, then you can save a lot in interest rates. But give them the money back.
Personal loan is a very important source to meet the shortage of money. But before taking any big step, consider the points mentioned above.