4 tips to remember while looking for personal loans and how to pick the ideal one!
There comes a time when you might feel helpless dealing with a financial crisis as you have insufficient saving to deal with it. It can put anyone in a stressful situation as not being able to deal with major bills might push them to sell their possession at a cheaper price just to fulfill the need. But a sober solution is offered by public or private banks and Non-Bank Financing Companies (NBFC) in the form of personal loans. Such type of loans need less documentation and also takes less time to disburse the loan amount.
Personal loans are quick to get as the loan applicant isn't expected to submit their collateral security to apply for the loan. As long as you pass the eligibility criteria set by the loan lender, you are good to go. But since it is also a financial decision which is taken in hurry, it is wise to follow some guidelines to avoid loan burden as you repay the loan. Hence we suggest you some tips so that you can avoid making mistakes while quoting a personal loan!
1. Quote what you need!
This is the most basic mistake most of the loan applicant make while quoting the loan amount. Much money would the lenders will be able to provide you depends on your credit score and monthly income. Even if things are positives and you are at the favorable spot to over-quote loan amount, the ideal thing would be to avoid it. The rates of interest on personal loans are quite higher and such rates will be charged by the lender on the basis of how much loan amount you borrow. So it makes sense to quote the loan amount you need the most and stick to it.
2. Finding the right loan lender!
We are not telling you to be brand conscious about loan products too, but idea is to find ideal loan quotes for you. It is not necessary that a top of the line loan lending firm would offer right loan quote for you as your income status and credit history plays an important role in influencing those factors. So look for a loan lender that offer better financial assessment and consider your CIBIL score while offering loan quotes to you. Personal loan take less time to process, which makes them as ideal financial tool for you. Some private and NBFCs are also in the race to improve the personal loan approval speed so those financial institutions are also worth considering.
3. Finding the right balance!
The rule is simple when you borrow a loan you repay it in installments and in a given period of time. Most of the personal loans provider offer less-lengthy tenure period option to the applicant. And to avoid paying higher EMI and interest rate, applicant prefers to choose longer tenure so installments would be easy to follow. Though decision should be taken as per your monthly budgeting, if your economic profile suggests you can bail shorter tenure period, you should go for it. The idea is to choose EMI and tenure which will not be a burden nor take too much time and money to fully repay the loan. You can also improve your credit score if you repay the loan in time.
4. Mind all the benefit:
Your goodwill would eventually be useful when you decide to opt for a personal loan. Most loan lending parties in the market allow benefits on personal loans if the applicant has credit score aka CIBIL score more than 750. Benefits like reduction in the rate of interest or even let you extend your loan borrowing limit. Having a good credit score means the applicant is good at repaying any loan he or she has taken in past. If your credit score is less than standard benchmark, then starts repaying the loan on time and never miss a single EMIs.