Ever wonder how your friend is so relaxed even after taking debt or loans on their shoulders? Or how did your neighbour manage to send his kid abroad for higher studies? Well, the answer is Personal Loan!
A Personal Loan is a multipurpose solution that helps you end financial worries, unlike certain other loans that one can only take for specific purposes.Personal loans are in high demand because of their flexibility. It does not require any collateral and is also available at a click of a button, unlike collateral-based loans known for their higher loan processing time requirement. It lets you plan big purchases, consolidate debts, pay for urgent financial needs, fund your child’s higher education, as well as your much-awaited vacation or wedding.
Even though a Personal Loan may be an easy and quick way to get finance, one must take note of the essential things to consider before getting a personal loan.
Borrow only the Required Amount: Depending on your requirement, decide the amount you need to borrow. Evaluating the loan amount required is critical. While excess borrowing might become a burden later, short borrowing might not help you meet your ongoing requirement. Defining the principal amount will help you design a Loan that gives you maximum output at an affordable EMI while maintaining a good bureau score. One should also note that the loan amount availed has an impact on certain costs associated with loan processing like stamp duty, loan processing fees, and foreclosure charges, including EMI.
Application processing time: Quick approval is always what every loan applicant looks for, and it becomes even more critical when the loan is for an emergency need. Always try to opt for lenders who do not delay your application by unnecessary processes and lengthy documentation.
Opting for the right Repayment Tenure: Repayment tenure is one of the factors that impact your monthly EMI outflow. Your Personal Loan EMI depends on the tenure within which you wish to repay your loan. Longer tenures may lead to a lower EMI, but you end up paying higher interest. So make sure you opt for tenure with an affordable EMI, which you can pay comfortably without incurring any penalties due to delay in payments.
Consider the Foreclosure or Prepayment Flexibility: Life is unexpected; hence it is wise to choose a lender that offers the option to foreclose or pre-pay the loan in full before the actual tenure of loan at no extra cost. It is a wise decision to foreclose your loan if you have surplus money available, thereby reducing the interest outflow. Poonawalla Fincorp offers Zero Foreclosure charges on its Personal Loan offering.
Personal Loan Interest Rates: The interest rate is the key deciding factor as it differs from lender to lender. Although Personal Loan has a lower interest than Credit Cards, some providers have elevated hidden charges. Thus, it is recommended to compare and then decide the lender which provides the best interest rates.
Enquire about any Additional Costs: Availing of a loan may have many hidden costs attached like documentation cost, fee and extra charges. In matters that involve money, transparency in every deal is essential. This factor highly depends on the credibility of the loan provider. As Personal Loans do not need you to mortgage your assets against them, it is always wise to opt for reputed financial organisations in the industry.
Your Credit Score: Every lender checks your credit report to evaluate your creditworthiness. A good score gives you the upper advantage of lower interest rates, better negotiating power, quick approvals and more. Keep a timely check and maintain your credit score by on-time repayment of all your credit products.
Compare other Loan alternatives: Lastly, a personal loan may be the first thing that comes to your mind in times of an emergency. But it is advisable to consider all other options as well to get the best-suited solution.
A Personal Loan helps you break expenses into smaller and more manageable payments. You must ensure that you choose a credible and affordable personal loan provider. If you consider all these factors before taking a Personal Loan, you can enjoy fulfilling your needs without turning loans into debt traps.
Are you looking for a Personal Loan? If yes, you can check out our Personal Loan offering, which comes at affordable interest rates and a hassle-free loan application process.
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