A personal loan provides instant funds not only when you face a financial crisis, but also when you make big-ticket purchases. It could be to refurbish your house, take a holiday or finance a wedding. A fast personal loan can help you a lot. You can even utilise a low-interest loan to consolidate your high-interest debts and save on monthly payments. And now with digitization, you can get instant personal loans online as well.
To make the most of this collateral-free financial tool, there are a few things you should keep in mind. And we are going to discuss just that. Here is a list of dos and don’ts that you should know.
Things to consider
An instant personal loan in India can help you meet your financial needs seamlessly. And to have a smooth experience, here are some points you should consider before you apply for a loan.
#1 Compare offers to find the best rates
Never choose the first offer you find. It is essential you compare loan details between different financial institutions to find the one best suited for you and your needs. Lower interest rates reduce the equated monthly instalment (EMI). Financial experts suggest that your EMIs should be within 40-45% of your total take-home pay so you can make the repayments on time. Check personal loan interest rates offered by different lenders and choose the most competitive option. This will help you get a quick personal loan and understand the market offerings as well.
#2 Plan a viable repayment strategy
Working out a strategy to repay the loan is essential before you apply for one. Today you can get instant personal loans online, and avoid the stress of going to your lender’s branch. But with personal loan instant approvals, many people forget this step and have to stress about EMIs later.
You can use a personal loan EMI calculator to form an estimate of your EMIs. It helps you to decide on the loan amount that matches your repayment capacity. Weigh in factors like your salary, expected increments, expenses, and chart out a sound repayment road map. You can opt for a lender that allows increasing your EMI as your income increases and enables you to be debt-free faster.
#3 Assess the terms of the loan
Reading the loan terms and conditions thoroughly is a must. This helps you understand any hidden charges your lender might levy without your complete knowledge. Getting a fast personal loan is preferred but you must ensure you have taken the time to study the details before agreeing to the loan terms.
Be aware of the charges that can increase the loan cost. Look into the processing fees, penalties on delayed monthly instalments, and partial-prepayment charges before you apply for a personal loan.
#4 Prefer straightforward application procedures
Lengthy loan application processes and complicated paperwork can delay your access to funds when in need. Consider applying for personal loans online. It requires minimal documentation and offers quick disbursal. Loan terms that are straightforward and easy to understand are always better as they help you gain a complete picture.
#5 Choose the tenure with care
A longer tenure helps reduce EMIs, but a shorter tenure lowers your loan’s overall costs. Select the tenure as per your finances but choose a lender that allows prepayments at no charges. It will enable you to reduce your debt burden if you have access to additional funds. Personal loan instant approval is easier if you have decided on your loan tenure.
Things to avoid
Getting instant personal loans online is a big advantage in today’s fast-paced world. But with quick personal loans, you should also ensure you avoid certain things. These are as follows.
#1 Missing EMIs
Do not miss your monthly repayments. Defaulting on your loan settlement results in hefty fines, reduces your credit score and affects future personal loan eligibility. Any subsequent application for a quick personal loan can be jeopardized if you default in repaying your EMIs.
#2 Borrowing from unauthorized lenders
You will come across several seemingly lucrative loan offers in the market. And many will offer instant personal loans online. But not all of these are reliable. Consider established financial institutions only to avail of the best personal loans. It will help you avoid hidden charges, loss of personal data and other inconveniences.
#3 Making multiple loan applications
In your search for low-interest personal loans, do not apply to too many lenders. Every time you place an application, the lender looks into your credit history. It is called a “hard inquiry” and negatively impacts your credit score. Do your research when applying for personal loans. Instant approvals will depend on your past credit history, and applying to too many lenders will negatively impact your candidature.
To sum up
An instant personal loan can help you tide over difficult financial situations. However, it is essential to check the credentials of the lender before applying. With a renowned name such as Tata Capital, you can be free of stress. The financial institution offers flexible EMI schemes and tenure to ease your repayment process. Apply online and fund your expenses without any hassle.