Things to Know Before Availing Personal Loan
It is crucial to review and understand information at the table before applying for a personal loan. Not only does it help you maximize your chances of loan approval but also aides you to get a better deal with respect to interest rate on your personal loan.
You’re often told that you need to check your credit score before applying for a personal loan to know your true financial standing. However, apart from the credit score, you should consider other important factors before applying for a personal loan as well. These factors include interest rates applicable, loan application and approval process, documents required, and more.
When you carefully examine the above criteria, you will have a better understanding of what works best for you and enable you to avoid mistakes.
Let’s examine 5 important things that everyone should know before applying for a personal loan:
- Credit Score
A credit score is the representation of your creditworthiness, which is based on your history of credit payments. Credit score ranges from 300-900 and a score of 750 and above is considered perfect for smooth loan approval.
Vice versa, a lower credit score results in either rejection of your loan application or attracting a higher rate of interest on a personal loan.
If you’re planning to apply for a personal loan, consider checking your credit score frequently to know of your chances of loan approval. If you’re facing issues with a low credit score, you can boost it by paying your dues on time, making frequent payments, and keeping your credit utilization rate up to 30%.
- Rate of Interest
One of the most basic things you should consider before applying for a personal loan is the proposed rate of interest. Rate of interest decides your EMI and helps you assess your repayment ability.
Though the lending market is flooded with options, you must take your due time to research about the best money lenders in your city. While the rate of interest can vary across different lenders, it is also dependent on a few metrics in your credit profile.
- Loan Tenure
While preparing your loan application, consider the nature of loan repayment tenure. Check if the lender you’ve chosen offers a flexible repayment period or not. It is important to do this exercise, as that will help you plan your repayment schedule better without adding any stress to your monthly finances.
Always go with the lender that offers personalized loan repayment tenure to align with your short- and long-term financial needs. Your desired loan tenure also dictates your EMI (check out this personal loan EMI calculator to know your expected EMI) which is why it’s important to carefully weigh this factor.
- Credibility of Lender
There used to be a time when there were just a few banks with numerous branches that used to offer personal loans. The loan processing time taken by the banks was too much and the experience could be excruciating for some, especially when one is seeking finances in case of an emergency.
However, today there are convenient and faster options to avail a personal loan with multiple NBFCs and banks now in the picture.
Take your time to carefully research the credibility and market situation of the lender you’re opting for to prevent getting cheated.
- Eligibility Criteria
Though different banks and lenders have their specific criteria for personal loan eligibility, some common set of factors apply to all. While applying for a personal loan, you need to make sure that you meet the eligibility criteria laid down by the lender you choose.
Also, go with the lender that has the most suitable criteria for personal loan approval to enjoy a smooth process.
- Loan Process
This is something that probably every loan applicant dreads – loan application & approval process. The preconceived notion is about the loan process is that its long, a lot of hassle, and takes a lot of trips to the bank.
Defying that notion, money lenders like Clix Capital take pride in offering a simple and digitized loan application process where an applicant has to fill an online loan application form, submit the basic documents, and get assisted by the support staff at the earliest. If things are in order, all it takes is 15 minutes* for us to disburse the loan amount to the applicant’s bank account.
Avoid falling for any unreliable operator and find a lender that is transparent in their dealings while offering you a smooth loan approval experience. Clix Capital offers personal loans up to INR 25 lakhs and special, pre-qualified loan offers to select applicants.
Share a few basic details and check your eligibility for a pre-qualified personal loan offer here.