Whether you are planning to renovate your house, or buy a new car, or paying for your education or dealing with any emergencies personal loan comes in very handy. There are many lenders that would lend you money, it has become quite easy and simple, thanks to the internet. But there are few rules which you should always consider before getting a money loan.
Follow these 7 rules when taking a personal loan.
- Figure the interest rate
The first step in selecting a personal loan is to figure the interest rate. Different banks/financial institutions offer different interest rates as per your loan amount, credit score and duration. This is the key element while selecting a personal loan.
- Say no to advance EMI’s
Never pay advance EMI’s even if some banks/financial institutions as you to pay for it as you may end up paying more interest rate in such cases. You may pay the loan amount earlier (pre-payment) than the stipulated time. Some banks charge pre-payment charges, but it is often informed earlier.
- Keep the tenure short
Opting for more tenure for s short loan may sound quite tempting, as you must pay lower EMIS’s, but you end up paying more money in form of interests. On the other hand, opting for shorter tenure, you pay higher EMI’s for shorter period; but also lower the Interest rates. Hence always opt for shorter tenure.
- Repay on Time
Always pay your loan amount/EMI’s on time as not paying the loan amount on time will levy penalties on your amount, also would affect your Credit score as well. This might hence lead problems while taking the next personal loan or credit card.
- Don’t approach to many lenders
It might lead to negative impacts if you approach too many lenders to compare interest rates. When you apply with too many lenders you may come as a credit hungry person, because every time you apply with many lenders, they study your history/profile. Avoid such situations and apply with only 1-2 lenders.
- Check for any other charges
Usually there are no other charges levied on your personal loan other than the processing fees but is always advisable to read the terms and conditions thoroughly before opting for the personal loan to prevent yourself from later disappointment.
- Don’t take money loan for investment
Even though small loans come with lower interest rates, this money should not be used for investment purposes. Money is invested with the idea of making your money work and not to pay the interests. Hence it is highly advisable to not invest your loan amount.
So, once you have known all these 7 steps to apply for personal loan, you can save yourself from any more difficulties and stress while opting for a personal loan. Hoping to have a hassle-free service while applying for a personal loan.
