5 Things You Need to Know About Personal Loans
According to reports from TransUnion, the consumption of personal loans has increased from 23 million to 27 million in today’s day. In fact, personal loans were the fastest growing product in 2016 and 2017.
So, what is it that makes personal loans so appealing to many? While applying for instant personal loans, it is important for you to take into consideration several factors like credit score, charges, interest rates, and repayment plans, among other things. It will also prevent you from making certain mistakes like choosing the wrong financial lender or borrowing more than you need.
Here are the 5 things you need to examine before applying for an online personal loan India:
1. Credit Score
A CIBIL score is a representation of an individual’s creditworthiness, which is mainly based on their history of credit repayment. The CIBIL score ranges anywhere from 300 – 900, and a score above 750 is considered to be ideal. A lower credit score signifies to the financial lender that there is bad debt management on the borrower’s part and may result in their loan application being rejected.
2. Compare interest rates in the market
Comparing the interest rates offered by different financial lenders ensures that one avails the lowest rate possible. This will enable the borrower to select an instant personal loan at the lowest possible interest rate and a kind of interest that is best suited for them, making the repayment of EMI on the loan easier. One of the best new-age financial institutions that provide affordable interest rates with a hassle-free loan experience is Clix Capital.
3. Assess all costs
When borrowing personal loans, there can be a lot of costs including processing fee, prepayment fee, and late payment fee. These costs are generally pre-decided by the financial lender but get added to the amount that one is supposed to pay. So, before applying for the loan, consider the various fees that your lender charges to get a clear estimate of the whole loan. This can help you vastly in managing the finances better.
4. Type of Personal Loan
Before continuing with the loan, it is essential to know which type you want to avail - secured or unsecured. Unsecured personal loans don’t require any collateral in the form of property or house. In this, the financial lender decides whether you are qualified for the vlog based on your financial history. Some lenders also offer secured personal loan options. Such loans are backed by collateral including savings account or CD.
5. Be Aware
There are various financial lenders across the market that provide low-interest rates or gimmicky schemes. Initially, these loans often turn out to be more expensive than expected. Also, at times, they are based on floating rates of interest. This makes the interest rate appear low initially but with gradual time passing, it can increase substantially.
These were a few things that should be kept in mind before availing personal loans. Do keep these in mind and do proper research before making your mind about getting these loans.