Design Credits: Sheetal Patil
Personal Loans are one of the fastest means of getting some additional money when you are running short of cash. Banks usually offer Personal Loans with minimal documentation and faster processing if you have a steady income source to pay the EMIs. We’ll help you understand what you need to keep in mind when opting to take a Personal Loan.
Why are you applying for the loan?
Before you apply for a Personal Loan, think about your reasons for taking the loan. Do not apply for a loan on a whim. Remember, you will have to pay the monthly EMIs and manage your monthly expenses as well. Keep in mind, a default or delay in paying the Personal Loan EMIs will have a negative impact on your Credit Score.
Your Credit Score is key
Your Credit Score is an important deciding factor when it comes to applying for a Personal Loan. It might be a good idea to check your credit score before applying. If you already have a low Credit Score, do not apply for a fresh Personal Loan as a rejection of your loan application could further bring your score down. Remember, a good Credit Score will play a vital role when you apply for any kind of loan such as a Home Loan or Car Loan, in the future.
Don’t extend the tenure
Even though you have the option of extending the tenure of your Personal Loan, it’s not always a smart thing to do. While opting for a longer tenure might reduce your monthly EMI burden, it also means you need to pay a higher amount of interest on the total loan amount. Try to manage your monthly finances and pay more every month towards your EMIs.
Even if banks are ready to offer you a higher loan amount based on your salary, don’t give into temptation and borrow more than you need to. While Personal Loans can certainly help when you are in need of funds, remember that they come at a cost. Don’t bite off more than you can chew.
Now that you know what to look out for before applying for a Personal Loan, take a look at our offers; we’ve got loads to choose from.