Personal loans have gained wide demand among people because online personal loans do not have any restrictions on their use.
You have the option of using them to fund various expenses, regardless of age, credit rating, and employability.
But as these unsecured loans come with a series of criteria to be eligible for a loan application, here are some aspects that you should check before taking out: an online personal loan.
Personal loans have gained wide demand among people because online personal loans do not have any restrictions on their use. You have the option of using them to fund various expenses, regardless of age, credit rating, and employability. But as these unsecured loans come with a series of criteria to be eligible for a loan application, here are some aspects that you should check before taking out: an online personal loan.
Here are some of the dos and don’ts of getting a loan approved:
- Compare the interest rate – Different people have different eligibility requirements for personal loan to get loan approval. the interest rate offered may vary from bank to bank. As a borrower, it is your responsibility to check and compare the interest rates offered by different banks. This will help you get the best deal at the most affordable rates.
- Homework on the loan amount you need –You don’t have to need to take out a personal loan just because you have an outstanding amount receivable. In addition, a personal loan is not the final solution to meet your financial needs. It may be just a few dollars for some people to deal with the emergency, while for some it may be to clear a large amount. Whatever the reason, be sure to determine the exact amount you need and only borrow them if you really need them. This way, you don’t have to pay interest on more than you don’t need.
- Check the eligibility criteria of lenders – as indicated above, the personal loan eligibility the criteria will be different depending on the bank. This helps you know the best lender that is best for you based on your eligibility criteria. This benefits the applicant by facilitating loan approval and easy processing.
- Look for additional benefits and offers provided by the lender – Before applying for a personal loan online, do your homework on the different loan offers in terms of additional services and features offered. These can help you manage a better repayment ease by lowering the cost of borrowing.
- Using an EMI calculator – While it doesn’t seem so important, it helps you save that extra interest rate with longer tenure. A EMI calculator allows you to easily calculate your monthly EMI based on the selected mandate. The shorter the term of office, the better your financial planning will be.
Not to do:
- Don’t ignore your credit score – Your credit score is the basis of your loan approval. The higher your credit score, the higher your chances of getting the loan approved. A decent credit score ranges from 750 and above.
- Don’t apply for a loan to cover non-essential expenses – Choose your needs wisely. Unless there is a strong need to meet an essential expense, especially in these COVID times, don’t just apply for a personal loan online to meet your not-so-essential expenses. For example, applying for a loan to buy a luxury car or to throw a party can get expensive because it comes with higher costs in the long run, putting a huge financial burden on you.
- Do not take the maximum loan available – If your credit score is good enough, some lenders may invite you to take out the maximum loan available. This is not a good thing because your requirement may be for a small amount, but taking a large amount will unknowingly lead to financial burden. Apply according to your needs and repayment capacity.
Don’t ask for multiple loan applications at once – We all have a habit of applying for one thing from multiple sources, be it for a loan or a job so that any lender will approve the application. Keep in mind that each loan application results in a credit score check, which reduces the score slightly.
Well-known banks such as Axis Bank offer online personal loans at affordable rates and indicate the eligibility criteria on their web portal. You can also check the IME with the repayment term of the borrowed funds. So, keep these dos and don’ts in mind and apply for a personal loan online wisely!