Most of the personal loans are unsecured credits which means whosoever applies for a personal loan does not require to submit any of his collateral as a guarantor and is also free from restrictions in terms of usage. Personal loans are availed in order to fulfil your emergency needs. They are one of the most popular forms of credit. With demands growing up for the personal loan, one can get a personal loan online in India, either by downloading the lender’s app or by visiting their official website.
The amount that you stand eligible while applying for a personal loan, is entirely determined by your income and your credit history. If your credit score is 700 and above then it becomes relatively easy to get a personal loan, as against someone whose score may range in between 300-650.
After applying for the loan and conducting a quick verification and approval, the loan amount is disbursed into your account. The personal loan needs to be repaid in the form of equated monthly installments (EMIs) and the amount you pay as an EMI will depend on your personal loan tenure.
Based on the above explanation, it would actually seem easy taking a personal loan, but you can still make mistakes that can cost you a fortune. So, before deciding on applying for a personal loan online, here are the 5 things that you should keep in mind.
- Do not ignore the interest rates – It is understandable that you might feel tempted to get your hands on the loan amount as early as possible, but, it is to be noted that you should never strike a deal with the first lender you come across. Instead, research and compare the rates offered by different lenders, because you might miss out on the best deals. Hence, a lower interest rate can ease your financial burden.
- Do not take things granted about your loan tenure – If you are entitled to pay your EMIs for a certain period of time, say 48 months, then try to repay the EMIs as soon as possible. A personal loan is a debt which is accompanied by the increasing interest over time. So, do not take easy on your repayments.
- Do not miss on your EMIs – Ensure that you regularly pay your EMIs as missing even a single payment can damage your credit score and may even impact lower chances of you getting fast loan approvals in the future.
- Do not borrow more than required – You should always have a clear picture of the loan amount you need, as that can help you in not borrowing beyond the required amount. Remember that a personal loan is a debt and you will be required to pay interest. Hence, you can save yourself from burning a hole in your pocket.
- Do not use the loan amount to fulfil your fantasies – Personal loans come with higher interest rates. Instead of utilizing the amount to buy a fancy gadget or on some unplanned vacation, utilizing the loan amount to meet essential goals can serve you with the right purpose.
Finally, taking a personal loan can prove extremely helpful in times of need but it can also spell disaster if you handle it carelessly. As always said, prevention is better than cure. So, think and analyze the mistakes that you can make before deciding on applying for a personal loan online.