Personal loans are a viable recourse for monetary shortages. These loans can either be secured or unsecured, depending on whether there is collateral/mortgage involved.
Here are a few points to be considered before availing a personal loan:
Eligibility Criteria and Documentation Requirements:
The primary aspect of availing a loan is the eligibility criteria. Among all the conditions checked by lenders before availing a online personal loan, your credit score is of prime importance as it is a measure of your creditworthiness. Lenders take a check on your repayment capacity, assets owned and steadiness of your job before granting a personal loan.
EMI: Following disbursal of the loan, you will have to repay the loan in the form of Equated Monthly Installments (EMI). The EMI generally amounts to nearly 40% of your monthly earnings and is decided by the lender based on your earnings and your expenditure.
Credit History: Past defaults on loan repayments do not bode well for your personal loan application. Lenders are not too keen to grant loans to individuals who are not consistent in the payment of their EMIs.
Miscellaneous Costs: In addition to the rate of interest, you need to consider charges like late payment charges, and cheque bounce charges that can add up to your financial liabilities when you opt for a personal loan.