Helpful Tips For Those Looking For a Personal Loan
Personal loans are slowly becoming very commonplace – not only to meet money needs in case of emergencies, but also to spend on expenses that help improve quality of life.
In this article, we offer you some tips to better get acquainted with personal loans as a product, application process, and eligibility criterias. The idea is to tell you important points about these products:
- Since these loans do not have any collateral requirements, the lender takes into account your credit history and loan repayment capacity to decide whether to approve or reject your loan.
- The interest rates are higher than other secured forms of loans like housing loan, car loans, etc. this is quite normal as there is no collateral in case of personal loans. So lender naturally needs to be compensated for the additional risk being undertaken.
- Lower the rate of interest, better it is for you as interest costs will be lower. So approach multiple lenders to get the best deal possible and negotiate hard.
- If you have been irregular with your credit card repayments or EMIs, then be ready to face rejection of your loan applications. Its better to build up a good repayment history before applying for personal loans.
- Since there is not much documentation or physical verification to be done, the processing time for these loans is quite less.
- If your existing EMIs take upto 40% of your monthly salary, then you might not get a fresh loan. Its because lenders believe that borrower needs to have some money left after EMIs for his general expenses and savings too. So its best to clear off some of your loans before applying for a personal loan.
- Even if you are eligible for more loan that what you require, do not borrow beyond what you can comfortably repay.
These are some tips to help you get more out of personal loans and also to ensure that you do not push yourself to a corner when taking a personal loan.