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Top Mistakes to Avoid When Applying for a Personal Loan

· Finance

Personal loans are very easy to obtain and for the same reason are also known as instant loans. These days a number of financial institutions including NBFCs (Non-Banking Financial Institutions) are offering this loan which have very simple eligibility criteria which makes it very convenient for borrowers.
 
However, despite the easy application process and the simplified personal loan eligibility criteria, a number of applications get rejected. This is owing to the very common mistakes which are repeatedly exhibited by the applicants which should be avoided if you are thinking of applying for a personal loan. Mentioned below are a few of them -
 
1) Not Knowing the Reason
 
Many people apply for the loan without even keeping at the back of the heads the purpose for which they are applying for the loan. You need to ensure that you have more than a valid reason to opt for the loan because at the end of the day it is loan, i.e. a debt which needs to be repaid back within the agreed upon time-frame.
 
2) Lack of Research
 
People tend to make the mistake of applying with the first lender that they come across. The question here is why should you do that when there are a number of lenders who are available in the market? Make sure that you compare the lenders based on various parameters such as the interest rate, the maximum amount of loan that can be offered to you, and most importantly the repayment period.

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