Business
Dos And Don’ts For An Instant Personal Loan In India
In the fast-paced changing lifestyles of people in India, one may need cash immediately for an unexpected expense. An instant Personal Loan is the most convenient funding option to cover such financial requirements. They are the best financial sources because they are collateral-free and have no end-use restrictions. As a result, these loans help people with their short-term cash-flow issues.
Furthermore, applicants do not need to visit the lender’s office even once since more NBFCs offering Personal Loans support 100% digital loan procedures. However, one single mistake can ruin the entire benefit of taking a Personal Loan. So, here are a few do’s and don’ts of Personal Loans in India that one must know.
Do’s for Instant Personal Loans
– Examine the Eligibility Criteria
Most NBFCs have simple eligibility conditions to make Personal Loans easily accessible. Standard eligibility criterion includes the applicant’s age, income, work experience, credit rating, financial obligations, etc. Examining the selected lender’s eligibility conditions before applying is essential so that the applicants do not end up applying for a loan they do not qualify for. Doing that will lead to loan rejection, time wastage, and reduced credit rating due to unnecessary hard enquiry.
– Compare Various Lender’s Interest Rates
Many lenders offer competitive Personal Loan interest rates in India. Therefore, comparing them before finalizing a lender is critical. The applicant’s ultimate goal should be to find the lender offering the lowest interest rates without compromising customer service.
– Make a Robust Repayment Plan
After selecting the lender, use an EMI calculator to estimate the monthly EMIs. Calculating the EMIs will help decide the right loan amount for an appropriate repayment tenure. Consider costs, salary, and potential hikes while developing a payback strategy. Then, select a lender that allows EMI adjustment and prepayment without extra charges. Paying EMIs on time will make the borrower debt-free earlier and help improve the credit score.
– Select a Suitable Loan Tenure
NBFCs are flexible with their Personal Loan repayment terms. A longer-term will decrease the EMIs, while a shorter one will lower the overall loan cost. Selecting a loan term suitable to the budget and needs is crucial. However, lenders must allow borrowers to pay off their loans earlier without charging additional fees. With such a lender, borrowers can reduce their debt burden when they have more money.
– Inspect the Documentation Requirements
Most NBFCs have minimal documentation requirements for Personal Loans. However, they still necessitate a few essential documents, including identity, income, and residence proof. Lenders supporting online loan procedures require applicants to scan and upload their documents. While choosing a lender, the applicant must look at the documentation requirements and ensure they can fulfil them.
Don’ts for Instant Personal Loans
– Beware of Borrowing from Unlicensed Lenders
While looking for an instant Personal Loan lender, one may come across several lenders that seem to be advantageous. However, not all of them are trustworthy. An applicant must always borrow from a well-established NBFC only that is registered with the RBI.
– Never Miss EMIs
Once the applicant receives the approval and disbursal, they must ensure EMI payments are on time. Missing EMI payments result in hefty fines and significantly reduce the borrower’s credit score. Eventually, missing the loan EMIs decreases an individual’s future loan eligibility.
– Don’t apply for Multiple Loans at Once
While comparing Personal Loan interest rates in India and looking for the best lender, many people make the mistake of applying for multiple loans at once. Doing this is not the right strategy, as it may backfire. Every time an individual applies for a loan, the lender pulls a hard enquiry on their credit report to check their creditworthiness. It reduces the credit score by a few points even if the applicant does not accept the loan offer. So, it’s best to compare lenders beforehand, select the most suitable lender, and apply to one. Nowadays, one may use the internet or loan comparison sites to compare lenders instead of applying to each lender separately.
A small instant Personal Loan is the best financing solution that assists borrowers in different financial situations, like a wedding, medical emergency, home renovation, education, vacation, or debt consolidation. However, while applying for a loan in India, it’s crucial to keep these do’s and don’ts in mind.
