7 Things to consider before applying for a personal loan online in India

In today’s times, costs of living have significantly increased causing many of us to face financial difficulties. In such times, when we are in urgent need of cash, the first thing we do is check for financial assistance. However, rather than losing face by borrowing money from friends & family, we consider opting for personal loans through foreign means such as banks & NBFCs (Non-banking financial companies).

After all, applying for a personal loan online is extremely easy, as they are collateral-free and require minimum documentation. However, before you choose to apply for an instant loan, do consider these 7 things:

1. How much cash do you really need?

More than often, when we are browsing through financial institutions to find personal loans with the lowest interest rates, we find that our personal loan eligibility is higher than we expected. Thus, tempting us to borrow more cash than we initially needed. At such times, it is really important to avoid falling for that trap; because the more loan amount you borrow, the higher is the EMI that you will have to pay. Thus, calculating your loan requirement before approaching a financial institution is crucial.

2. Avoid Applying for personal loans simultaneously

Before applying for a Check for additional charges When applying for a personal loan online, most of us carry out extensive research on repayment tenure, interest rates, etc. However, many of us tend to forget that financial institutions also levy additional charges such as processing fees, loan prepayment fees, late payment charges, etc. Thus, it is really important that we check all of the additional charges that we may incur before we personal loan online apply.

4. Check your personal loan eligibility

Now that you have finalized your lender, the next thing that you must do is check your personal loan eligibility with that particular lender. After all, every bank & NBFC (non-banking financial institution) has their set personal loan eligibility criteria that you must fulfil to utilize their instant loan product. Generally, financial institutions check your age, employment status, monthly salary, credit score, credit history, etc.

5. Avoid falling for unnecessary add-ons & plans

More than often, consumers fall for unnecessary additional products such as accidental insurance plans due to financial institutions’ sales pitch. Thus, you must ensure that you never fall into such traps; because then you would not only have to pay interest rates on personal loan EMI but also for the accidental insurance plan that you never needed! Further, there are two types of interest rates- fixed interest rates & floating interest rates; thus, properly calculate the overall costs that you will have to bear while deciding the best form of the repayment plan.

I specialize in writing finance blog; Particularly, topics related to personal finance, loan, insurance policy and financial management.