Personal Loan In India

7 Tips to Choose the Best Personal Loan in India

July 31, 2022 • 192 views
Author: PoonawallaFincorp Category: Personal Loan

A Personal Loan is one of the most feasible financial instruments to get money quickly for a variety of needs. A Personal Loan is the best choice for any requirement, be it for a wedding, a child's education, a medical emergency, travel, or any other need. It's an accessible line of credit that gives you the flexibility to respond to sudden financial needs. With minimal documentation, you can get the funds quickly—in just a few seconds or hours. The loan can be repaid over a period of time, either months or years, in convenient monthly installments. Thus, a Personal Loan is a very useful loan to have, and when used efficiently, can make your life comfortable.  
 
How do you pick the best loan applications in India when there are so many options available? 
 
Following are 7 tips on how to pick the best instant Personal Loan online to help you easily meet your financial obligations: 

1.    Consider your needs before applying for a loan

Consider the need for the loan before deciding to apply for one. Every loan involves the obligation to make monthly payments known as EMIs for the duration of the loan, which means they will be an additional expense in your future budget in addition to interest. Determine whether the loan you are taking will be used productively. For instance, you need to pay off credit card debt but are taking out a Personal Loan to pay for your vacation. You'll only accumulate more debt as a result. Therefore, be sure to effectively use the money you borrow. 
 

2.    Personal Loans & credit scores

Your ability to obtain a Personal Loan may depend entirely on your credit score. Even the best loan applications will be rejected if the credit score is low. Personal Loans are unsecured loans, and the risk for the lender is much higher. Hence, applicants with high scores are favored as it reflects their ability to be disciplined about debt repayments. You will have a good chance of receiving an instant Personal Loan with favorable terms if your credit score is 750 or higher. 
 

3.    Conduct research

Evaluate all your options before accepting a loan from a lender. Don't just impulsively accept a Personal Loan offer from the first lender you approach. There are several platforms that showcase loan options from various lenders, and their respective interest rates. A thorough examination will help you find a lender who will provide you with a Personal Loan at a lower interest rate and good terms. Additionally, make sure the loan you select fulfills most of your crucial needs. For eg- A lender might offer your low interest rates, but probably has a very high pre-payment fee. In case you plan to prepay the loan to save on interest payments, then availing a loan from this lender might not be in your best interest.  
 

4.    Check interest rates

As a rule of thumb, borrowers should generally aim to spend between 35%- 43% of their income on debt, which includes payments for Personal Loans, Mortgages, and Auto Loans. The interest rates on Personal Loans tend to be higher given that they are unsecured. Therefore, even a small drop in interest rates can have a significant impact on the total cost of your loan. Despite its convenience, making small monthly payments will ultimately result in you paying more for the loan overall. Thus, at the onset, you should aim at negotiating the best interest rate possible for your financial profile. Given the number of banks, and NBFCs offering Personal Loans, this should not be a very difficult task. You should check out the website of Poonawalla Fincorp which offers the most competitive Personal Loan interest rates with no hidden charges and zero pre-payment penalty.   
 

5.    Find out If you're eligible

Check with the lender to see if you qualify for an instant Personal Loan before you apply. Pay particular attention to your income and employment status. When deciding whether to approve a Personal Loan, one of the most crucial factors lenders consider is the borrower's income because it shows whether they will have the resources to repay the loan on time. The best loan applications are the ones that are aware of all the requirements and are duly filled with all the necessary information.   
 

6.    Don't make multiple loan applications

Your credit score may suffer if you apply for a loan from several lenders in a short period of time. If you do that, lenders will automatically assume that you need money and won't be able to pay back your loan. Your credit score will suffer as a result, which is not a good idea if you plan to apply for credit in the future. 
 

7.    Make sure your credit report is accurate

Make sure you've carefully reviewed the information in your credit report before applying for a Personal Loan. Check to see if the information on your credit report is true and consistent with your history of timely payments. Your credit score can suffer from even the smallest miscalculation, which can result in future credit requests being turned down. In the event of an error, make sure to have it fixed right away.  

Conclusion

One of the simplest loans to get is a Personal Loan. You can easily get funding even if you don't have any valuables or assets to use as security because you aren't required to put up any collateral. Personal Loans are among the most popular types of loans taken in India because of their wide range of benefits. It's critical to confirm the validity of your lender and the regularity and promptness of your repayments. The loan must be used for the specified purpose, which is the most important thing to remember. A Personal Loan can help you bridge a financial gap when used wisely, preventing the need to put your personal assets at risk. 

 

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