There is nothing to worry about if you do not have enough savings to cover your financial emergencies. You are not alone!
As a matter of fact, many people in India do not have enough savings to cover sudden expenses. Perhaps, you can apply for personal loans to cover these minor financial emergencies. However, there are a few important things to ask before getting a personal installment loan.
Following are 8 questions that you need to ask before you get a personal installment loan:
1: What information will direct loan lenders need to know about me?
You are needed to provide your lenders with certain details so as to get your application approved. After all, it only makes sense for them to loan you the amount after they know who you are and have confirmed that you can make the repayments.
For this reason, you are requested to provide information that proves your identity, a valid bank account, and a steady income.
2: What is the approval process?
Short term personal installment loans usually are easily processed and quickly approved. All you have to do is provide your lender with the requested information and answer a few questions.
In fact, there are even times when you hear from a lender on the same day of submitting your loan application. Upon approval, you might even receive the money in hand as soon as one business day.
3: Are there loans to avoid?
This is more of a personal decision. There are multiple ways of borrowing money when you need an immediate influx of cash.
However, one of the major benefits of securing a personal installment loan is that you do not have to repay the entire loan the next time you get paid. Here, you are provided with a longer repayment period and scheduled periodic payments.
4: How much should I borrow?
Ideally, you should not borrow any more money than you require at that point to cover your expenses. While applying for online installment loans, your lender will inform you about how much you are qualified to borrow.
This is based on several aspects. However, remember that you have to repay the loan amount along with the interest.
5: How much will I need to pay on my loan payments?
It is difficult to determine how much your loan payments will be until your lender processes your application. Based upon your monthly income and several other factors, your lender will establish your loan terms which will include your repayment amount.
6: How long will it take to repay my personal installment loan?
Personal installment loans tend to have an upper hand over payday cash advances as here you have a longer period of time to pay back the loan amount. In fact, they also have an advantage over credit card cash advances since the payback period is definite.
If you are making minimum monthly payments on a credit card cash advance, it might take you a couple of years to repay the loan amount. However, your loan terms will provide you details on your payback period along with the frequency of loan payments.
7: Is this a secured loan?
Most personal loans are unsecured loans. However, you need to confirm it with your lender before finalizing the deal. Secured loans usually need collateral (any personal property), whereas unsecured loans do not require any collaterals.
8: Does my bad credit mean that I cannot get a personal loan?
You are most probably eligible to secure a personal loan even with bad credit, a past bankruptcy, and charge-offs in your history. All you require is to meet the specific criteria set by your lender to qualify for an unsecured personal loan with a bad credit rating.
Before you take a personal loan, make sure that you are asking these questions and understanding your loan terms.
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