5 things to know before choosing an instant personal loan
You can use an instant personal loan to increase your finances or fill gaps when you face sudden monetary shortage. One type of unsecured loan, you can get personal loan in India from banks and non-bank financial institutions. In the past, you had to go through cumbersome application processes and wait a long time to get the financial support you want. Today, you can get a loan online and quickly get the money into your bank account.
However, before applying for a personal loan online, consider these 5 points. They will help you secure your finances prudently and successfully.
1) Evaluate your eligibility for a personal loan
Lenders require that you meet certain eligibility criteria before offering you a personal loan. These are usually centered on your age, your citizenship and, most importantly, your financial situation. Issuers are primarily concerned with loan repayment. To assess your repayment capabilities, financiers check your credit score. Having a score of around 750 should allow you to successfully reach the green signal. So before asking for a online personal loan, assess your income and your credit score as this will avoid possible rejection.
2) find out how much you should borrow and at what price
Although your financier may offer you a large loan amount, there are two questions you need to ask yourself. “How much do I need? And “How much can I afford?” Affordability is measured primarily by your debt-to-income ratio. It is the proportion of monthly income that is used to settle all kinds of debts.
Strive for a ratio of around 30%, as you need the balance to meet other obligations. If you really need more financing, look for additional sources of income as this will lower the ratio and thus make the loan more affordable for you. If it is not possible to increase your income, consider reducing the loan amount.
3) plan your reimbursement wisely
Today it is very easy to get a loan online. You can apply from the comfort of your home. However, don’t let the haste leave you without a well-established repayment plan. In fact, you don’t have to sweat over tiring calculations when planning your repayment. Just use an online calculator like Personal loan IME calculator to deduct your monthly payments. To do this, try to make the tenor as short as possible. A longer term reduces your IMEs, but increases the net amount you will have to pay throughout the term in interest.
4) read the fine print
An instant personal loan is convenient and in an emergency it can save you a lot of time. As with other products online, you may be tempted to click “I agree” on every box that comes your way and in doing so, you may miss the fine print. However, spending a few moments in this step can save you a lot of stress down the road. Check prepayment and foreclosure fees, late fees and interest rates, loan cancellation fees, EMI bounce fees, and other legal fees.
5) Find Out What Your Favorite Lender Has To Offer
Once you’ve got these essentials in place, research the USPs that your favorite financier has to offer. For example, when you opt for a personal loan from NBFC such as Bajaj Finserv, you not only benefit from a 24 hour loan disbursement and a variable repayment term of 12 to 60 months, but you also benefit from the flexi loan facility. This function allows you to borrow from your sanctioned personal loan several times without having to make new loan applications. Additionally, you can reduce your monthly payments by up to 45% by paying IMEs with interest only during the term and offsetting the principal at the end of the term.
Now that you know what to look for when looking for instant personal loan, take the next step and get quick access to finance up to Rs.25 lakh.
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