Whether it is a financial emergency or funds are required to maintain your lifestyle, a personal loan can help you in almost every situation. But opting for a personal loan isn’t as easy as you think. You have to keep a few aspects in mind before applying for Fullerton India Personal Loan to avoid any trouble. Some of those factors are:
#1 Check Your Credit History
A personal loan in India doesn’t include any collateral. Due to its unsecured nature and thereby higher risk for the lender, lenders expect applicants to have a good credit history reflecting on-time repayments. In case you have a credit score of less than 750, your chances of getting the loan will reduce. Even if certain lenders may agree to provide you with the funds as long as you meet their other criteria; they will charge you higher interest rates (Check Interest Rate) and/or offer lower amounts. Therefore, you need to check and maintain your credit history by repaying all existing debts. You should also ensure that you are not over-leveraged.
#2 Calculate the Required Amount
Most lenders offer personal loans with a maximum limit depending on their own policy and how eligible the applicant is. For instance, a Fullerton India personal loan could be upto INR 25 lakhs. However, a higher loan amount will mean a higher EMI, since personal loans need to be repaid within a maximum of 5 years. The best option here is to examine your exact needs, and then apply for the exact amount of funds you need. For example, if you need a loan for financing a wedding, you can calculate the budget of the wedding and get the sum that you don’t have. In case this analysis isn’t possible, you should try for a flexible personal loan, an overdraft facility or a loan against securities.
#3 Compare Interest Rates
Different lenders offer different interest rates based on their own policies. Thus, it is always a good option to compare the interest rates of lenders before submitting your personal loan application. It will help you opt for the lowest possible rates, and the repayment will also become easy. You can use online tools for this comparison; it will help you take a better, more informed decision.
#4 Go Through the Additional Costs
Personal loans come with additional costs. Some of these are:
- Processing fees: During the processing of your loan, you are charged a fee. This cost is generally subtracted from your loan amount automatically
- Insurance: Many lenders also attach an insurance component, which will be added to your monthly EMI
- Prepayment: If you decide to repay the loan before its term ends, you will have to pay an extra cost for it. Lenders charge this for the interest amount they would have received otherwise
Please go through the loan agreement thoroughly to avoid nasty shocks in the future. It is also advisable to go through the terms and conditions on the lender’s website in order to understand such charges before applying for a personal loan.
#5 Don’t Apply for Multiple Loans
Some people apply for personal loans with multiple lenders as they aren’t sure if the loan will be approved or not. This leads to hard inquiry, which reflects poorly on their credit report. Thus, it would be a safer option to understand a lender’s eligibility criteria on their website as well as by speaking to their representative before applying online.
#6 Consider Repayment
Personal loans are seamless funds that can be availed anytime. However, it holds power to change your entire financial future. That is why you should always consider repayment options and amount even before applying for the loan. According to your current financial situation, you can check how you can comfortably pay your EMI within the constraints of your monthly budget.
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