Everything You Should Consider Before Getting A Personal Loan

By Medha Roy Chowdhury | December 19, 2018

Are you in dire need of cash and thinking about taking a Personal Loan? We’re happy to help. But first, ask these questions.

Are you overwhelmed by an impending need for cash? We understand you. Have you considered getting a Personal Loan? It can come in handy when you are swamped with responsibilities that have the potential to burn a hole in your pocket.

What’s best about Personal Loans? Unlike a Home Loan, Car Loan or an Educational Loan, you don’t have any restriction in terms of the usage of the loan.

Your Personal Loan can cover you during a crisis such as a financial crunch or a medical emergency. In the event of a marriage in the family, it can help you take care of the unforeseen expenses. Don’t be surprised if you come across someone with plans to get a Personal Loan for home renovation!

Additional Reading: Answering FAQs On Your Personal Loans

We have compiled a list of questions that you should ask yourself before getting a Personal Loan. Read on to know more.

Is the purpose worth taking a loan?

A Personal Loan is a multipurpose loan. The use of the money depends on the borrower. Therefore, ask yourself if it is worth taking the loan.

Pro tip: If you are struggling to pay off your Credit Card dues, consider getting a loan and clearing off the payment of the outstanding amount. Remember to check if the interest on the Credit Card is much higher than the interest on the loan!

Carefully analyse your needs before taking a Personal Loan. Once you take a loan, you will have to treat it like a financial commitment and religiously repay the borrowed sum along with interest, in the form of equated monthly instalments (EMIs).

Additional Reading: FAQs On Short Term Personal Loans

Are you eligible for the loan?

This factor can be a deal-breaker if not taken seriously. Whether or not you are eligible for a Personal Loan depends on a lot of factors, the crucial ones being your age, income, and Credit Score.  It’s wise to check your eligibility prior to applying as that will give you an idea of the highest limit of money you could ask for.

Also, stay a step ahead by checking your Credit Score before applying for a Personal Loan.

Pro tip: Check your eligibility for Personal Loans now!

Avoid filing multiple applications! Keep in mind that a number of applications for loans may give lenders the impression that you are not reliable in terms of money management. This is one of the prime factors that bring down your Credit Score.

Additional Reading: Advantages of Personal Loans

What is the loan amount needed?

Your purpose decides the loan amount you need. However, there may be a discrepancy between the Personal Loan amount you need and your eligibility for the loan. In certain cases, borrowers tend to apply for more than what they need.

Calculate the value of expenses you need to tackle with your loan, check your eligibility for it, and then apply for the loan.

Pro tip: Don’t forget to check the interest rate before applying!

Additional Reading: 5 Clever Tips to get Better Rates on Personal Loans

What is the total sum you will be paying?

This is one of the most important questions you ask yourself before getting any kind of credit. In most cases, borrowers tend to opt for a longer tenure of repayment in the hope of having to pay smaller EMIs. What they tend to overlook is that, while keeping the EMI smaller, they end up paying more than what they have borrowed.

This is because the interest on the loan is calculated in a compounded way. Therefore, longer the tenure, higher is the sum you pay. Don’t let this daunt you! Start by trying out our Personal Loan EMI Calculator!

Additional Reading: Personal Loans That Give You Tax Benefits

Does the idea of piles of paperwork bore you? We hear you! By applying for a Personal Loan through BankBazaar, you can avail a paperless application process and get an instant approval.

Stand strong in the face of financial difficulties by opting for a Personal Loan! Are you are in search of other financial products and services? Look no further as we have a host of options just for you!

All information including news articles and blogs published on this website are strictly for general information purpose only. BankBazaar does not provide any warranty about the authenticity and accuracy of such information. BankBazaar will not be held responsible for any loss and/or damage that arises or is incurred by use of such information. Rates and offers as may be applicable at the time of applying for a product may vary from that mentioned above. Please visit www.bankbazaar.com for the latest rates/offers.
Category: Money Management Personal Loans UCN
Medha Roy Chowdhury

About Medha Roy Chowdhury

Square peg in a round hole, Medha reads whenever she gets the chance to. She is happiest when travelling and dreads having to choose between the hills and the sea. Dog lover at heart, she is in pursuit of adopting a few canine friends someday. Weird as it may be, she bakes when stressed. Previously a Market Research Editor by profession, she takes a keen interest in finance. When she is not reading, you’re sure to find her with her ukulele.

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