Applying for a Personal Loan Online? Do's and Don'ts You Need to Aware

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A personal loan proves to be the most convenient option to meet urgent or planned financial requirements. It has no restrictions on credit use. A personal loan allows you to make large purchases, cover emergency cash crunches and household expenses, consolidate debt, make necessary home renovations, etc. Personal loans have continued to grow at a fast pace over the past decade. The value of these unsecured personal loans increased 9.60% in March 2022 compared to the same period in the previous year.

Fullerton India instant personal loans are preferred because they offer competitive interest rates, and the loan amount is disbursed quickly if an applicant fulfills all the eligibility parameters.

Significant Benefits of Obtaining a Personal Loan:

• Personal loans do not require collateral.
• Personal loans can organize a vacation and cover all your airfare, travel, and lodging costs.
• These are instant loans that disburse the credit in a bit of time.
• Get credit against the most basic documentation.
• Personal loan interest rates can be adjusted with a good CIBIL score.

There are certain do's and don'ts that an applicant should know before making the loan application. Let us see what these are.

Do's of Applying for Personal Loans:

Maintain a Good Credit Score

Credit history and score are an integral part of the loan process. It shows a borrower's creditworthiness, which is important for a lender as they are providing a loan without collateral. People with a high credit score of 750+ have greater chances of getting a personal loan.

Look Beyond Interest Rates; Make an Informed Decision

It is an overlooked area by most borrowers. To make an informed decision, you must read the fine print of the terms & conditions. It includes repayment schedule, processing costs, prepayment charges/penalties, personal loan interest rates, and the method to compute interest. These small details may lead to an increased loan cost for late EMIs. Research well and evaluate to make a final decision to get an easy personal or Aadhaar card loan.

Evaluate your Needs Diligently

Despite the ease of getting personal loans, you must utilize them carefully. Evaluate what your needs and desires are and how much you need. Evaluate the EMIs that you can afford to repay on time. Avoid purchasing unnecessary items you desire and then fighting to repay the loan.

Verify the Lender's Credibility

Apply for a loan with a reliable source with a reliable lending history. Validating the lender's credibility is crucial. Ensure that the lender is verified by the Reserve Bank of India (RBI).

Use an EMI Calculator to Make a Reasonable Financial Backup
A borrower should use a personal loan EMI calculator. It helps to determine the appropriate personal loan amount as per the repayment capabilities. It helps to choose the right EMIs. A borrower should consider their current salary, examine their monthly obligations, potential raises in income, and expenses and then develop a repayment strategy. If you expect a salary raise in the near term, you can pay off the loan early and get out of debt faster.

Choose a Reasonable Repayment Tenure
A longer-term loan can increase the interest rate and thus the overall borrowing cost. With a shorter-term loan, one can decrease the loan EMI. When you have extra funds, lessen your debt burden. If it is not a burden for you, choose a proper loan term that can meet your financial requirements.

Don'ts you Need to Aware of

Say 'No' to Unofficial Sources
Generally, most borrowers prefer instant online loans. You should be vigilant of non-verified lending offers. To avoid becoming a victim of cyber traction or fraudsters, do not entertain any non-verified lending offer in your mail or SMS asking for confidential information, like, bank details, PIN, etc. Beware of offers guaranteeing a personal loan without income proof or CIBIL check.

Avoid Multiple Loans at One Time
A borrower should not apply for multiple loans at the same time. It may bring a huge financial burden that increases the chances of late EMIs and affects the credit score poorly. Instead, you can cover all your financial needs in one loan and further manage your finances accordingly.

EMIs are Not to be Missed
Ensure that you pay all the loan EMIs on time. Missed EMIs increase the interest on due amounts and bring huge fines. It will decrease your credit score also. You may not be able to get an instant loan in future.

Check your Credit Score Beforehand
A credit score is a primary factor that a lender considers to approve a loan. A borrower needs to meet all the eligibility criteria to get a loan sanction. To avoid any stances of a declined loan application, check your credit score. It should be above 750 on a scale of 300-900. A rejected application impacts your credit score also.

Thus, be mindful of these do's and don'ts to make the safest possible deal for your personal loan.