Applying for a personal loan? Consider these do’s and don’ts

When people need funds for their urgent requirements they ask banks or any other financial organisation such as the Non-Banking Financial Companies (NBFC) for the services which will suit the best and for that personal loan is the best way to get immediate funds to meet your unforeseen or unplanned expenses.

There are various methods of availing of a personal loan. It is considered that this loan is unsecured and hence, convenient to get, but there are always some factors involved when you are availing personal loans which you need to keep in mind so you won’t face any issue in the time to come.

Do’s and Don’ts when availing personal loan

Do’s:-

1. Interest Rate Calculation:

When you are availing the loan make sure you calculate the amount of interest charge using the loan interest rate on the fund you are asking for from the lender. Many people without calculation of interest get the loan and they don’t realize that they have to pay hefty interests too.

2. EMI calculation:

Calculating EMI is also a crucial part. This is where the decisions are made using a personal loan EMI calculator will give you the exact details of how much will be your expenses for your demanding tenure as well which can vary from bank to bank like Purvanchal Bank Personal Loan offers a 9.99% of the interest rate for 12 to 60 months.

3. Checking Eligibility:

There are different-different eligibility criteria for every bank so whichever lender you are looking for, you should read the policy carefully so you won’t feel like getting tricked by the lender. Eligibility criteria can vary but the above two calculations matters after your eligibility has been considered.

4. Minimum Loan Amount:

Make sure you are well aware of the minimal amount that the bank is providing and assess the amount you need as asking an extra amount will increase your debt amount too. For e.g. you are asking for Rs 1 Lakh amount of loan but you need Rs. 70000 then asking for Rs. 30000 more funds will increase your debt too so it will be like you will be paying for the unwanted amount.

5. Be ready with the documents:

Personal loans need a minimum amount of documents for verification to make sure you are ready with them because there are no alternatives to those important documents required.

Don’t:-

1. Ignoring Credit Score:

Ignoring your credit score will pay a crucial score if you have a CIBIL score below 750 then it will affect your interest rate as well. For example, the benefits of Purvanchal Bank Personal Loan can be availed by you when you have a good CIBIL score.

2. Applying without Calculation:

Most customers make the mistake of availing without using a personal loan EMI calculator and they end up feeling like paying extra amounts but there is always a calculator available for them on the website already.

3. Ready to spent money on debts:

When you are borrowing money always remember are you ready to pay that amount in the future and with banks, you have to pay the interest amount as well so having a proper plan will give you relief as well.

4. Enough Income Source:

Availing a loan is not that complicated a process but for the customer, it is his duty to think does he have enough sources to pay those debts which he will be bearing from the personal loan and since many banks like Purvanchal Bank Personal Loan availing interest rate is low will give reliefs as well.

The only concern for whether lender or borrower is looking at all factors involved while they are availing the personal loan amount whether it is debt paying amount or his demanding fund amount.

Author's Bio: Gaurav S. Khurana is the Founder and CEO of Dialabank and has had a great career in the Banking and Financial Services Sector. He has an experience of 18 years in the sector and has worked at Senior Roles including National Sales Head at ING Investment Management India and as the Vice President Citibank. A post-graduate from IMT, Ghaziabad. Gaurav started his career as a Named Account Manager in Xerox.

Being a part of this field for a long time now, he has written many informative articles and blogs benefiting and assisting many in making decisions regarding the policies provided by various banks and non-banking financial companies such as the Syndicate Bank Gold Loan

Gaurav S. Khurana is the Founder and CEO of Dialabank and has had a great career in the Banking and Financial Services Sector. He has an experience of 18 years in the sector and has worked at Senior Roles.