A personal loan is one of the most convenient forms of credit thanks to the convenient application and documentation process. Additionally, personal loans have no end-usage restriction which allows you to utilize such finances to meet several monetary obligations such as debt consolidation, meet vacation expenses, etc.
Regardless, there are certain factors which you need to assess and iron out before you take a personal loan to ensure your convenience in terms of approval, usage, as well as its repayment.
These factors are discussed below –
- Check your credit score
As personal loans are unsecured credit facilities, one of the primary grounds on which approval is your credit score. You can check cibil score without login and unlock your customized loan offers. This score is attributed after accounting for several variables which include your credit history, repayment history, credit utilisation ratio, etc. These variables are essential to determine your creditworthiness and how soundly and responsibly you have managed your borrowings in the past. Most financers consider a score above 750 prospective for personal loan approval.
Choose a suitable tenor
Repayment tenure for personal loans range till up to 60 months. Choose a tenor according to the principal and your affordability when you take a personal loan.
Compare interest rates and other associated charges
Thoroughly research the interest rates offered by different financial institutions before applying with any financier. Also, check other costs associated with a personal loan such as part prepayment charges, foreclosure charges before reaching a decision regarding the lender.
Determine your loan amount beforehand
Before you apply for a personal loan, consider the expenses which you need to meet using that credit. After duly evaluating such monetary obligations apply for a loan amount accordingly. Availing credit in surplus of your requirements will result in an unnecessary financial burden. However, you can also benefit from flexi personal loans, where you need to pay interest only on the utilised loan amount instead of the total amount you borrow. You can also pay interest only EMIs for the initial stage of the tenor.