What Mistakes to Avoid when Taking a Personal Loan

Personal Loans
Personal Loans

A personal loan is generally the go-to when it comes to immediate financing. The process of application is hassle-free, and even the disbursal is done in significantly lesser amount of time. However, it is always safe to be cautious while applying for a loan as errors can cause your credit rating to plummet. This can further be a step back for all your plans.

Five errors to avoid when you apply for best personal loans-

• Not comparing options properly:

Compare all your alternatives. This is essential so that you can make an informed decision. Do not just narrow this comparison to just the evaluation of personal loan interest rates. Consider other factors like ease of documentation, speed of disbursal etc. Do your homework before you find the right lender.

• Not taking efforts to improve credit score:

Your credit history is taken into consideration when you want to get personal loan. If you have got a clean record wherein you have fulfilled your financial responsibilities, your credit score will be good, and this plays a crucial role in the loan sanctioning process and in the rate of interest that the bank will levy. If your credit score is not up to the mark, chances are that either your application will be rejected or the rate of interest will be high.

• Not considering repayment capacity:

When you’re applying for a loan, go beyond the Personal Loan EMI. It is essential that you keep in mind unforeseen expenses that might lead to a liquidity shortage, and might affect your EMIs. It is always better to be two steps ahead when it comes to financial planning, and here’s where EMI calculators can be of help. Just the tools you need to gauge the amount that will be going as your instalment, leaving you prepared to manage your finances in a better way.

• Delay in payments:

Don’t miss those EMIs that you dread when you get a personal loan. Whether you make your EMI payments on time or not, this too impacts your CIBIL score. What is also affected is your credibility when you apply for any other loan in the future. Not to miss mentioning the penalties that will be levied on you, which also add to your debt burden.

• Opting for multiple loans/lenders simultaneously:

When you’re applying for loans, your credit report always shows the dates when lenders have made a check on your financial background. With multiple background checks, the perception that is built is that probably your expenditure is exorbitant, dropping your chances of getting a loan with a lender of your choice . In such cases, even if your loan is approved, your rate of interest will be significantly high. Hence it is a smart choice not to go all out when applying for Best Personal Loans.

It is always a good idea to be prepared. Keep these pointers in mind when you apply for a loan to save yourself from unnecessary stress. But with lenders like Indiabulls Dhani, there is no reason to worry. The documentation process is simple, and loan disbursal happens in about three minutes.

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