Important Things to Check Before Availing Personal Loan

Most of the people avail personal loan for their uses because it is unsecured loans and need no coelenterates. But there are some factors which every people have to check before applying for the personal loan online. Here is a  list of

Things to Check Before Availing Personal Loan:

• Relationship with lenders-

You can apply online or offline in any of the Public/Private sector banks and NBFCs. Most of these offer similar interest rates but vary when it comes to instalments and processing fees. Having a long term relationship with bank can give you extra feasibility on loan amounts and interest rates. If you apply for a loan on your salary bank account then bank hardly check any documents. This eases the overall process along with helping you get interest rates. NBFCs offer Competitive pricing, minimal documentation, digital processing compared to other banks.

• Special Offers

Many banks offer special discounts on personal loan interest rates during festivals and special occasions. You can check such offers to get the best interest rates. Certain lenders even allow refinancing on existing loans. Sometimes the regulator also reduces All such offers aren’t permanent and can end at any time. Hence keep watching such offers and apply instantly.

• Maintain a healthy Credit Score

Credit card score is the number which decides your ability to repay the loan. The credit score is calculated from all your financial transactions. Prompt EMI instalments, previous loan repayments, payment history and various other factors affect the overall credit score. A good credit score allows you to bargain on interest rates and loan limit. Thus maintaining a good credit score can save you from paying heavy interest rates.

• Credible employer

If you are employed with a credible employer, the chances of securing a favourable interest rate would be higher. Lenders prefer lending to employees who are earning well and have respectable jobs with stable employers. Therefore if the borrower is working in a stable firm, she can look forward to receiving a competitive rate of interest from the lender. In fact, borrowers working with the government or PSUs may be perceived favorably by lenders.

• Maintain a healthy repayment record

A loan default would appear in the borrower’s credit report for seven years. Hence it is imperative to never default on a loan. Borrowers must be prudent about managing their expenses and ensure that EMIs are cleared in full and on time every month. If the borrower is able to showcase a healthy repayment history then the lender would be open to offering lower interest rates.

Reference Read: Factors to Check Before Applying a Personal Loan Online