Personal loans can help you through some of the big purchases in your life while saving on the interest rates and a lot of related hassle. Not surprisingly, reports suggest that the demand for personal loans has been increasing in the past couple of years. People generally avail personal loans for financing home improvement, funding the next big trip, etc. There are a few questions that one must pay close attention to before applying for Instant personal loans.
Here are some questions you must ask yourself before applying for Personal Loans.
#1 What Is The Exact Amount You Would Need?
The first step towards choosing to take a personal loan is to know how much money you’d need. Depending on what you need the personal loan for, you can calculate the amount with the personal loan calculator at EarlySalary – which clearly indicates your expected EMI, interest costs, and more!
#2 Do You Want To Pay The Creditors Directly, or Do you Want the Money To Be Transferred To Your Account?
If you are availing personal loan to pay off a consolidated debt, you can choose to have the amount transferred directly to their accounts. However, usually, banks transfer the amount to your checking account.
#3 How Much Time Would You Need To Pay Off Debt?
Once your personal loan application gets approved and you have received the amount, you’ll generally have to start paying the monthly installments back within 30 days. The amount you decide to pay monthly and the interest depends on the time you have taken the loan for.
However, EarlySalary offers instant loan within ten minutes. You can check your eligibility on the application, get your documents approved in no time, and the loan amount will be deposited into your account in no time.
#4 What Would Be The Interest Rate?
The interest rate for personal loans relies on a couple of factors like your credit score, loan amount, time for repayment, etc. Interest rates on personal loans can be as low as 3.49% and as high as 36 percent. If you have a good credit score and you choose the shortest repayment term possible, you’d get the least interest rate on your personal loan.
#5 Can You Afford Monthly Payments?
When you apply for a personal loan, you have the chance to choose what kind of repayment plan would work the best for you. Depending on the level of your income and the cash flow, you can choose your repayment plan. Sometimes, lenders may provide you an incentive if you choose the option to autopay.
Generally, people choose to make their monthly payments as low as possible to pay the loans back over a more extended period of time. For shorter repayment periods, the monthly payments are generally high.
But choosing more extended periods of repayment comes with high interest rates. And choosing shorter periods of repayment comes with low interest rates. This only means that because your monthly payments are minimal and the interest rates are higher, you pay much more than the actual amount.
You may also choose to enable smart pay via EarlySalary. Under this, you can clear off your bills easily, and you wouldn’t have to wait for a minimum due amount to pay. Furthermore, once you approve of your EarlySalary limit, you can pay your entire credit card outstanding via a simple journey on the app.
#6 What Is Your Credit Score?
Before you apply for a personal loan, it is essential to know your credit score and make sure you qualify. Personal loan lenders generally look for candidates who have a good credit score, especially online banks. However, if you already have a relationship with your bank, it may favour your loan request depending on your bill payment history.
People with poor credit scores tend to face difficulties in getting loans. While there are many ways by which you can improve your credit score, one way is to ensure that you don’t apply for loans with too many banks.
#7 How Soon Do You Need Funds?
Some personal loan lenders deliver funds electronically within a day or two once your application has been approved. Some may even take up to ten business days. If it’s an emergency, be sure to check out EarlySalary Instant Loan for faster approvals – in the order of hours!
#8 How Will The Personal Loan Affect Your Credit Score?
Personal loans can be called a form of an installment credit card but generally for more significant amounts. So if you pay your loans on time and there is no late fee charged, or the bank didn’t have to run behind you to get the payment, your credit score would only get better. Some may say that adding new installment loans may improve your credit score, but there is no point in adding yourself to more debt unless you need the money.
Personal loans can be a great solution when you need instant cash. Things can be a bit tricky if your credit score is not good. But if you have kept a good credit score, things would go smoothly for you. After the personal loan gets approved, the only next step is to pay the installments on time.
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