A personal loan provides instant funds not only when you face a financial crisis, but also when you make big-ticket purchases. You can even utilize a low-interest loan to consolidate your high-interest debts and save on monthly payments. Make the most of this collateral-free financial tool by avoiding common borrowing mistakes. Here is a list of dos and don’ts that you should know:

Things to consider:

1. Compare offers to find the best rates: 

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. 

Additional Read: Tips To Avail Lowest Interest Rates On Your Personal Loan

2. Plan a viable repayment strategy:

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:

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 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.

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.

Things to avoid:

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

Additional Read: 5 Simple Ways To Manage Your Personal Loan EMIs

2. Borrowing from unauthorized lenders: 

You will come across several seemingly lucrative loan offers in the market. 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 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.


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.

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