A personal loan refers to a multipurpose loan that can help you easily meet your unexpected financial emergencies and lets you manage big-ticket purchases. It is a collateral-free loan that can be applied in a hassle-free manner from the comfort of your home. This credit option offers you numerous benefits.
To ensure a convenient application process, you must have in-depth details regarding the do’s and don’ts of instant personal loans. This guide will explore key factors you must consider while applying for a personal loan.
Do’s for Getting an Instant Personal Loan
Below are some factors you must consider to get an attractive interest rate and terms.
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Compare Lenders
Before you apply for an instant personal loan, the first step is to do thorough research and compare different lenders available in the market. Doing this will help you to choose the best lender that matches your requirements and help you secure better loan terms. You must settle for the lender that offers the most competitive interest rate.
Apart from researching the interest rate, you must meet eligibility criteria, repayment flexibility and the payment processing method.
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Choose a Suitable Loan Tenure
The loan tenure can impact your interest and EMI payouts. Hence, you must choose the repayment period with thoughtful consideration. Not thoroughly assessing repayment spree can severely affect your financial well-being.
Instant personal loans offer flexible repayment periods. A longer tenure will reduce the EMI burden, whereas the option for a shorter loan tenure helps in reducing the overall interest outgo. You can choose a suitable loan tenure based on your budget and requirements.
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Check Overall Cost
The total cost of a loan can be accurately computed through an EMI calculator. This tool becomes operational by inputting essential details such as the loan amount, the preferred loan tenure, and the applicable interest rates. By leveraging this calculator, you gain the flexibility to evaluate various loan scenarios that help in informed decision-making.
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Carefully Read Fineprint
There are numerous lenders that charge hidden fees and costs, including foreclosure charges, loan processing fees, prepayment penalties, etc. All these costs significantly affect the amount you need to repay. Therefore, you must thoroughly assess the terms and conditions related to the loan document. Be wary of all those lenders who hide these charges in their final loan processing documents.
Don’ts for Getting an Instant Personal Loan
There are some of the don’ts that you must stay cautious about while applying for an instant personal loan. These safety checks will help you get a loan with a favourable interest rate and terms.
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Avoid Applying from Numerous Lenders
When you apply for a personal loan, the lender will inquire with the credit bureau. Applying for a loan from numerous lenders in a shorter period will cause ‘hard enquiries’ that might impact your credit score. A low credit score will make your repayment capabilities questionable, thus affecting your loan approval process. Therefore, you must refrain from applying for loans from numerous lenders.
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Don’t Miss on EMIs
When you apply for an instant personal loan, you must ensure timely payment of EMIs to avoid penalties imposed by the lender in case of default. Given the elevated interest rates associated with personal loans, the penalties for non-payment of EMIs are comparatively higher than those for other loan types. Failing to meet EMI obligations can additionally result in a decline in credit scores, impacting future eligibility for obtaining personal loans.
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Refrain From Over-Borrowing
Since an instant personal loan for a large amount can be availed easily, you must not be affected by this lure. You must always ensure that you apply for the actual required amount. Borrowing more than your requirement can actually strain your budget in the long run.
Consider your income status and other planned and unplanned expenses to calculate the required loan amount precisely. Doing this will help you find the amount that you can easily manage to repay over the loan tenure
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Don’t Only Look for Loans with Low Interest Rates
Although applying for a loan with a competitive interest rate is an essential feature that you must look for, it is not the only prerequisite. There are numerous other factors like processing fees, prepayment charges, penalties, and other charges that can affect your repayment amount. Therefore, you must consider all the factors that can affect your loan amount.
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Don’t Borrow from Unrecognised Lenders
In this digital world, online scams have increased rapidly. Numerous lenders offer great deals that might seem lucrative but can lead to scams like loss of personal details or hacking of accounts. Thus, to stay aware of all these issues, it is advisable to apply for a loan from a reliable lender. You must evaluate lenders’ credibility by checking their online website and customer reviews and avoid too-good-to-be-true offers.
Get a Loan from a Reliable Loan App
As discussed earlier, following the do’s and don’ts will help you fetch instant personal loans easily and at the most competitive interest rates. By making an informed and strategic approach, you increase your chances of loan approval along with enjoying a manageable borrowing experience.
KreditBee is one of the most reliable digital lending platforms that is trusted by more than 7 crore Indians. With this loan app, you can seamlessly apply for an instant loan of up to ₹5 lakhs with a hassle-free documentation process. These loans are tailored to meet your requirements.
Download the KreditBee instant personal loan app and take a step closer to financial success.
