It can often get difficult to handle multiple financial obligations with limited funds and not enough savings. To top it, high inflationary rates are fuelling everyday costs, thereby straining our finances even further. A personal loan application can rescue you from an economic breakdown by providing you with a much-needed financial cushion. Today, there are multiple online lenders ready to offer loans at attractive rates and tenures.
This article lists down some tips that you can follow before availing a personal loan. To know more in detail, you can click here.
- Decide a realistic loan amount
Lenders perform a background check to know your repayment capabilities. To avoid rejection, you may want to apply for a loan amount based on your earning and repayment capacities. Ideally, the total EMIs from loans should not exceed 30% of your income. If the proposed loan amount is unrealistic, there is a high chance it could be declined. Calculate personal loan EMI using the online EMI calculator on the website of your selected loan provider to get a fair idea of your monthly loan repayment.
- Avoid multiple applications
A lending institution looks into your credit score and the status of your existing application to determine your personal loan eligibility. Thus, if you have applied for a personal loan through various lenders, it could hamper your standing to get a loan. This is because even if a single application gets rejected, it could negatively affect your credit score. This can impact your chances of obtaining a high-value loan in the future.
- Avoid taking simultaneous loans
You may want to avoid taking a loan within six months of an earlier credit. Applying for consecutive loans in a short time frame can cause lenders to become hesitant in approving your loan application. They could view the new debt and repayment as additional burdens. This is why it is a good idea to maintain a gap of at least six months before applying for a new loan.
- Have a steady source of income
Lenders look for borrowers with a stable job and work experience of two years and above. It would be best if you are employed in an organization for at least six months. Switching too many jobs in a short period could be a roadblock in getting your loan application approved. A lender needs to ensure that you have a steady source of income and can repay the loan on time.
- Balance your secured and unsecured loans
While a secured loan requires you to pledge collateral, an unsecured loan is collateral-free, for example, a personal loan. It is a good idea to balance the number of secured and non-secured loans to improve your credit score.
Following are some commonly asked questions regarding personal loans:
- Is it ok to take a personal loan?
Personal loans can be a viable option to cope with varied financial requirements. It can also improve your credit score and help you avail a bigger loan in the future. So, as long as you avail the loan responsibly based on your repayment capacity, it is ok to take a personal loan.
- What is the best way to apply for a personal loan?
The best way to apply for a personal loan is to choose the right lender with the lowest interest rate and comfortable loan tenure. You can fill out an online form on the lender’s website and get the money in your bank account within a few hours of the loan approval.
- What should I check before applying for a personal loan?
A few essential things to consider before applying for a personal loan include interest rates, repayment period, EMIs, prepayment option, lender credibility, late payments charges, and such other factors.
If you need funds to meet your financial requirements, consider filling an online personal loan application form of a reputed non-banking financial company like Bajaj Finserv. It also brings you pre-approved offers for personal loans, home loans, business loans, and a host of other financial products. It can simplify the process of availing your loan and also help you save on time. You can check out your pre-approved offer by sharing some basic information.