Tips To Consider Before Applying For A Bank Loan
Personal loans are one of the easiest, reliable, and efficient ways to get access to suitable financial solutions according to an individual’s needs on the simple terms & conditions imposed by lenders. If you fulfill the criteria, the lender will approve these loans instantly and release the funds within the same day.
Here we are sharing a few tips that every individual needs to keep in mind before or while applying for a personal loan. Let’s have a look:
1. Access Your Needs Before Taking Loan - The very first and foremost step to keep in mind while applying for personal finance is to note down all your needs and then try to figure out which of your needs is going to be fulfilled with a loan. Most of the common purposes for a personal loan include, for example, buying a vehicle or addressing a medical emergency or planning a vacation, etc. Depending on the prices and costs associated with your needs, decide the amount you need to borrow. There should be a fixed budget as it is not only about your financial commitment towards monthly payments, rather also deals with the interest payments on the taken out amount.
2. Maintain A Good Credit Score - While sorting out participant’s applications for the bank loan, the bank specifically pays attention to your credit score ie CIBIL rating as it presents your creditworthiness ie and ability to repay the loan. The better your credit history is, the brighter the chances of your loan approval are. So you need to pay attention to your CIBIL score which is ranging from 300-900 while the ideal credit score is 750. Additionally, a higher credit score also means that you can attract more loan offers including lower rates of interest, higher loan amounts, and longer repayment periods. While a lower credit score signifies your bad debts and may result in rejection of your loan application.
3. Check The Eligibility Criteria - The criteria of applying for personal finance can vary from lender to lender including age, occupation, income sources, etc. So, before applying for a bank loan, you need to check with your bank or financial lending institution regarding the eligibility criteria. The applicants are required to be within the age limit of 23 and 55 years along with other imposed conditions such as must be a citizen of India, and work at an MNC/public/private firm to fulfill the eligibility criteria.
4. Compare The Interest Rates - As the next step, you must compare the interest rates which are being offered by various financial institutions or banks. It can help you get a bank loan at the lowest rates. Though almost all the banks and lending solution providers offer personal finance with interest rates varying between 10.99% and 26% p.a, it is crucial to choose the right lender suitable to your requirements. You can compare these interest rates on various online financial platforms.
5. Pay Attention To Additional Costs - While applying for a bank loan, you need to keep one thing in mind that the costs of borrowing a bank loan do not only involve EMI and interest payments rather there are many other costs also you need to be concerned about. For example, processing fee, prepayment fee, and late payment fee, etc. Before applying for a bank loan, clarify these various types of fees that are being charged by your lender so that you could have a clear picture of the expenditures. Do not forget to read the terms and conditions of the loan.
6. Consider Your Repayment Plan - Before applying for a loan, you need to make sure if you have any pre-existing financial obligations such as your monthly expenses and EMIs, etc. The purpose is to check whether you can have a flexible repayment schedule to repay your loan amount so that you could manage your funds in a better way as well as hassle-free.
7. Do Not Submit Loan Application To Multiple Lenders - When you apply for a bank loan, the lender gets your credit history from the credit bureau so that they could have an idea about your repayment nature and creditworthiness. Here, your submitting your application to multiple lenders can show your credit hunger and may end up rejecting your application.
These were a few essential tips every borrower needs to pay attention to whenever applying for a bank loan.