A personal loan is one of the ideal forms of lending, and it is the easiest way to get instant funds. Personal loans being an unsecured type does not require any collateral as security. In that case, lenders look at other factors like your credit history, credit score, income and sometimes employment to determine your creditworthiness as a borrower. Taking a loan makes sense when you can afford the monthly payments for the duration of the loan term; this makes it easier for you to manage your finances and repay the loan conveniently if you’re applying for a loan for the first time you need to consider a few things to avoid common traps.
- Browse all Available Options
It’s best to research and look at all the options available in the market. With a whole range of financing options flooding the market, you might get confused and miss out on the best offers if you apply without comparing your options. You can get in contact with the lenders for better clarification on fees. If you do research online, you will get all the information of the lenders online where everything is readily available on their websites and can make calls too. From Fullerton India, you can avail Fullerton personal loan amount of up to Rs. 25 lakhs, with flexible loan repayment tenures of up to 60 months.
Fullerton personal loan interest rate starts from 11.99%, with an easy online instant loan application process.
- Look Up The Terms & Conditions
When you look for lenders for personal loans, you must look into the terms and conditions applicable on loan. Most people overlook this crucial part of reading the loan agreement carefully. However, it is advisable to carefully go through all the regulations of the loan to be aware of the terms. Also, consider the service tax, processing fee, and other additional charges that the lender may charge. Just like processing fees, the interest rate offered by different lenders may vary.
- Prepayment Fee
Most lenders offer prepayment on personal loans; this means that you can prepay your loan whenever you have enough liquid funds and repay the full loan amount. Earlier, prepayment on personal loans was chargeable, and the borrower had to pay some amount as prepayment charges. But now you can make prepayment on your loan without paying any extra charges. If your lender asks for prepayment charges on loan, understand the fact that the lender is trying to get you in a trap of making an extra payment.
- Deals and Offers
This strategy is used by many lenders to attract more and more borrowers; most of the time, online personal loan lenders seem to come up with multiple offers on loans. Such offers attract borrowers who are in need and become the prey of the marketing strategy of the lenders. You can avoid this trap by carefully analyzing the details of the offer. Keep in mind that lenders will not lend money when there is no profit for them. Try to find out the hidden clause or charges that might be applicable on loan. Personal loans are undoubtedly the ideal way to manage urgent cash crunches. But you can be smart enough to avoid getting trapped on great deals and enjoy the benefits of it at its best.
- Late Payment Penalty
Late payment penalties are chargeable when delaying your EMI payment. If the linked bank account with which your loan EMI is getting paid has less money on the day of deduction, you will be charged with a penalty fee for the same. A simple way to avoid this trap is to have an adequate amount in your bank account and have the EMI paid on time.
Now that you are aware of the things to avoid when getting a loan, you can apply for a Personal Loan for immediate financial requirements. Compare the interest rates, offers and other such details from different lenders and choose the best as per your requirements. Personal loans are the easiest way to avail quick cash, but at the same time keep in mind these are debt that needs to be repaid at some point. Hence, it is best to avoid temptations at all costs by putting the money to fair use. You can use the loan amount to clear your outstanding bill and other such payments. Defaulting on payments may harm yours on your credit score. Thus, you need to be aware of your finances and your capability of repaying the loan to avoid any problems later on.