Personal loans are ideal for both aspirations and pressing financial needs. Called an unsecured loan, this type of credit is extremely popular, making up 28% of all bank credit in India. Unsurprisingly then, there’s no shortage of lenders seeking to meet this market demand. Some even give you instant approval after applying, and you can have access to the full sanction of the loan in just 24 hours.
You can choose a personal loan depending on your wishes. It’s why it’s considered the best way for you to raise funds, be it for weeding, for a vacation, or medical treatment. Before you apply for a personal loan though, you must be aware of some essential things you need to consider before choosing your loan plan:
Tips for Choosing the Desired Personal Loan
Compare the Rates of Personal Loans
It is always the most important part before choosing your loan; you should know which one best fits you. Lower interest rate implies lower EMIs. So before you apply for a personal loan, make sure that you check all the possible lenders’ interest rates.
Select Your Loan Amount
When opting for loans, make sure you’re confident about the amount of money you require. You always apply for the amount you need instead of selecting an amount recklessly. Choose a lender who offers a substantial amount of loan and ensure that it covers all your expenses. Your EMI largely relies on the rate of interest and the amount of your loan, so you need to select a suitable amount that you can positively return in due time without facing any penalties.
Check on Extra Fees and Charges
While choosing a loan, compare the fees and charges in addition to the interest rates. The extra fees and charges include late payment fees, processing fees, prepayment fees, etc. The costs might be higher or lower, depending on the lender. You can apply for a loan on lenders like EarlySalary that promise no hidden charges and no prepayment fees. Before applying for a loan, ensure that you consider these factors to avoid spending more than you may have anticipated.
Enquire About Flat Interest Rates vs. Reducing Balance Rates
Some lenders offer an option for you to choose between flat interest rates and reducing interest rates. In flat interest rates, the amount of interest is calculated on the whole amount and applied to your EMIs throughout the entire tenure. In reducing interest rates, the interest on your loan reduces over the loan tenure as the loan amount is paid periodically. Before applying for a loan, choose your preferred mode.
Keep An Eye On Your Credit Scores
Your credit report is a summary of the loans you’ve taken and your repayment history. It includes details of credit cards, unpaid bills, accounts, and other activities and is impacted by several factors. As you may guess, it is crucial to keep a regular check on your credit scores to avoid any fraud or miscalculation. It’s also equally crucial to keep your credit score in check if you’re applying for a loan from a bank. While you can repair your credit score with a variety of actions, you may also want to explore new-age lenders that allow you to take a personal loan without a credit score.
Know About the Loan Processing Time
Always enquire about the required documents and the time for the loan to be sanctioned. Some banks take more time to approve loans than the others, so compare the duration required before applying. Banks with the option of online submission of documents require lesser time than the banks you need to visit.
If you’re on the lookout for urgent cash, head over to instant loan portals such as EarlySalary, which assure an instant disbursal of funds, in the order of hours, if not minutes.
Read the Terms and Conditions Carefully
It is crucial to know and understand each and every term and condition thoroughly. Always ensure you study the loan document carefully if you do not want to face any difficulties in the future. Ignorance of the clause isn’t valid grounds for violations, or even avoiding consequences. If required, take help from an advisor.
You can apply for instant personal loans up to Rs. 2 lakhs at EarlySalary. Here you can enjoy easy cash transfer, flexible repayment tenure, and no prepayment charges. Register with us now to enjoy the benefits as early as possible. Just makes sure you meet the rather liberal eligibility criteria:
Criteria for Applying for a Personal Loan
- The age of the applicant has to be between 21 to 60 years.
- The applicant needs to be an Indian citizen.
- The applicant must have a steady job (both public and private meets the requirement) with a salary, preferably above INR 15,000 or 25,000, depending on the amount
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