A long-awaited vacation, an important business purchase, home renovation pending for quite some time – so many seemingly straightforward decisions put on hold since we are not sure if we can afford it in the short term. The solution to this? Personal loans! These loans bring with them the promise of instant availability of cash to fulfil these needs. Seems enticing doesn’t it?
What’s even better is that these loans are unsecured (no collateral!) and it feels like a no-brainer. Here are some simple tips that will ensure that your loan becomes the ideal tool in helping you achieve your life goals.
- Apply with a purpose
- Study High-Level Eligibility
- Check Your Credit Score
- Correct Errors in Your Credit Report
- Decide How Much You Need
- Get The Best Deal From The Best Lender
- Read The Terms and Conditions
- Do Not Apply For Multiple Loans
- Check Interest Rates and Ask About Prepayment
- Wait for 6 Months Before Reapplying
Tips to get approved for a personal loan
1. Apply with a purpose-
A loan by any name is still a loan, and it is still going to mean monthly EMI payments. Taking a loan with the intent to splurge, knowing you already have other debts to repay, is obviously going to land you in bigger trouble later.
2. Study high-level eligibility-
Every lender has their own processing criteria, but you must know if you will satisfy the high level criteria set by most lenders. For example, a regular source of income is mandatory to be even considered for a loan. Other factors like your age, line of work and past loan repayment history is equally crucial. Click here to instantly know about your personal loan eligibility.
3. Check your credit score-
Ensure that you have a good credit score since your interest rates are going to largely depend on your creditworthiness.
4. Correct errors in your credit report-
Go over your credit report in detail and get discrepancies or errors in it corrected. This will prevent unnecessary hassles during the loan application process.
5. Decide how much you need-
Basic financial prudence dictates that you borrow only as much as you need and can easily repay. So, work out your finances beforehand and understand how it will impact you.
Tips for Application and Approval
1. Get the best deal from the best lender-
Utilise the many online resources at your disposal to compare various banks and NBFCs offering loans. Pay special attention to their reputation in the marketplace, especially with respect to transparency.
2. Read the terms and conditions-
Ask them to fully furnish their terms and conditions. Go through each clause and understand any charges you would be responsible for in addition to your EMI – processing fees, penalties on late payment, documentation charges and more.
3. Do not apply for multiple loans-
This is one of the most important tip for personal loans. Every loan application goes on your credit report and too many applications are bound to bring down your credit score and cause you long term issues.
4. Check interest rates and ask about prepayment-
Your lender is going to safeguard his investment. For unsecured loans, this usually means higher interest rates. A good credit score should allow you to shop for the cheapest rates. Remember to enquire about any penalties if you decide to close out your loan early through prepayment.
5. Wait for 6 months before reapplying-
If, despite every precaution, your loan application gets rejected, do not immediately reapply with another institution. This will only worsen the situation for you since lenders will assume you are desperate for money and may not be in a position to repay. Instead, spend time on improving your credit score using other avenues at your disposal. Keep your credit utilisation ratio at the lowest levels possible.
When used right, a personal loan can provide you short-term relief from pressing financial obligations or allow you to enjoy luxuries you weren’t in a position to afford. In today’s consumer-driven world, if something sounds too good to be true, it probably is. So, choose your lenders with care and use our tips for personal loans to make your dreams come true.
With Finserv MARKETS, applying for a Bajaj Finserv Personal Loan is easy, convenient and completely hassle-free. What’s more? You get a host of other features and benefits that you can avail. So why wait? Get your personal loan with us, today!
“Finserv MARKETS, from the house of Bajaj Finserv is an exclusive online supermarket for all your personal and financial needs. Loans, Insurance, Investment and an exclusive EMI store, all under one roof – anytime, anywhere!”