An instant personal loan can be beneficial to meet the financial shortages that are stopping you from achieving your financial goals.
However, loan approval primarily depends on your credit risk assessment by the lender, based on your credit score, income, job profile, etc. Here are a few do’s and dont’s to get an instant personal loan in India.
Do’s
- The Type of Loan Required
Make sure that the type of loan you plan on taking suits your requirements. An unsecured loan does not require you to put up anything as collateral against the loan.
On the other hand, a secured loan requires you to put up your assets as collateral.
- Plan On How Quickly You Need the Loan
Many lenders offer an instant personal loan in India where you can get the money in a matter of days, unlike more traditional lenders, which can take weeks to bring you the funds.
If it is not too urgent, then shop around until you’re confident you’ve found the best deal for you.
- Find a Lender That Understands Your Needs
Several lenders have made lending to borrowers with lower credit a central component of their business model and should be able to sort you out if you have lacklustre credit.
Most lenders offer flexible loan terms and allow borrowers to suspend payments for up to 12 months if they run into financial difficulties.
- Consider How to Repay the Loan.
Before you apply for an instant personal loan, work out how much you can expect to spend on loan repayments each month.
If you’re relying on a promised bonus or your salary to pay off the debt in one lump sum, opt for a lender that doesn’t charge any early prepayment fees.
Don’t
- Avoid Taking a Loan with the Lowest Rate
When taking a loan you shouldn’t make a low interest rate the sole deciding factor.
You’ll also want to look at the origination and arrangement fees, which in some cases could be high enough to negate any savings.
You would get from the rates.
- Borrow From Unofficial Lenders.
While searching online, it is easy to find unofficial lenders and loan offers that sound almost too good to be true.
These sites may offer attractive terms and rates, but you’re also exposing yourself to risk by entering a financial agreement with a company that is less well-established.
Without some official backing, you’re at the mercy of the lender who could suddenly jack up the rates, call in debt, or sell your debt to another.
- Ignore Your Credit Score.
If you apply for a personal loan without checking your credit score and then get rejected, that will bring down your credit score even more.
Even if your credit score is low, it is best to know in advance and approach one of the lenders that offer loans for bad credit instead of wasting your time applying for loans with companies that have rigid credit requirements that you don’t meet.
- Avoid Co-Signing anyone on your loan that you’re not sure about.
Asking someone else to cosign a loan might not seem like a big deal. After all, it is your loan, and you have every intention to pay it, you need someone else’s name alongside yours on the contract to get approved.
If you get a loan through cosigning, then there’s a chance that the lender doesn’t think that you can make payments and expects to have to call on the co-signer to cover the debt.
- Lie in Your Loan Application
Lying or withholding your personal information on your loan application is a big no. The bank or lending institution should be able to determine if you were less than honest with them quickly.
When that happens, your loan will undoubtedly be canceled, and your credit score will take a severe hit.
Keep the above-mentioned tips in mind while deciding on which personal loan provider to go with. There are numerous personal loan app where you can apply for a personal loan online through your phone. Before finalizing your lender do good research on the financial market and compare the lenders based on your financial requirements.
