Are you planning on taking a personal loan for the first time? As a first-time borrower, there might be so many doubts in your mind, be it about the interest rate and the tenure. Moreover, there are many traditional loan providers and the latest mobile loan apps in the market providing the best offers to ensure you take the loan from them, making the decision even tougher. But trust us, that doesn’t have to be the case. Doing anything for the first time is difficult, and taking a loan is no different. In such cases, you need proper guidance. In this guide, we will provide five tips you need to keep in mind while applying for a loan, be it a secured or unsecured personal loan, for the first time:
- Know your loan eligibility:
The very first thing to consider before applying for a salary loan online is to know your loan eligibility. What is that, you ask? Well, it is your creditworthiness. At the time of the loan processing, the lender will review your credit report, employment history, income level and existing debts. This will determine your interest rate or even whether you get a loan approval. Before applying, check your own creditworthiness. You can check your credit score from bureaus like CIBIL or Experian. Aim for a good credit score (Above 700), as it increases your chances of getting a loan.
- Research Multiple Lenders
When you are applying for a fast loan, do not go for the first borrower you find. You need to do your research. Look for different banks and Non Banking Financial Companies (NBFCs) and compare their interest rates, repayment terms, processing fees and above all, the customer review. You can do a comparative analysis on your own or compare the different offerings on an online tool. This will give you a clearer idea and will help you decide on a better lender.
- Calculate your EMIs:
Calculating your EMIs in advance helps you plan your finances better and manage your monthly budget with ease. You could use an online EMI calculator to determine the amount. Your EMI will be calculated using the easy personal loan amount, personal loan interest rate and tenure.
- Be aware of hidden charges:
Along with the interest rates, some finance loan come with additional charges such as the processing rate, late payment penalties or foreclosure charges. Read the loan agreement beforehand carefully and ensure you understand all the associated fees to avoid any surprises.
- Assess your repayment ability:
Before applying for a personal loan, assess your repayment ability thoroughly. Consider your monthly expenses and financial commitment to determine whether you will be comfortable with the monthly emi that you have calculated. Taking on more debt than you can handle can lead to stress down the line, so keep all of these pointers in mind before applying for a loan.
In conclusion, when you are applying for a loan for the very first time, you do not need to be afraid. All you need to do is do your research, check your eligibility, check which lender services suit your financial needs, calculate your monthly emi and ensure it fits into your monthly budget and finally be wary of any hidden charges. If you keep these pointers in mind, you can rest assured you will make the right loan decision.