In recent years, personal loans have become very popular due to their flexible nature and quick processing.
Don’t have money to pay for unexpected expenses? No issues, Personal loans can help you out. Need some funds for marriage related purchases, home renovation, holidays, etc.? No worries. Money taken as personal loan has no restriction on its end use. There is full freedom to use the money as you want it.
But nevertheless, this is borrowed money and hence, you need to be careful about it. You need to consider a few things before you take that easily available personal loan:
- Personal loans are unsecured in nature and are approved after assessing applicant’s credit history and loan repayment capacity.
- Since these are unsecured loans, the loan interest rates are higher than those of other secured loans like housing loan, car loans, etc.
- Being a loan after all, lower the rate of interest is better it is for you as interest costs will be lower. So make sure to approach multiple lenders to get the best deal possible and negotiate hard.
- You need to have a good repayment (credit) history to get personal loans. If you have been irregular with your credit repayments or other EMIs, then be ready to face possible rejections of your personal loan applications.
- The processing time for these loans is less as there is not much documentation or physical verification to be done. Lenders only need you to submit ID proof, income proof, address proof and age proof while applying for personal loan.
- If you already have some EMIs running that take up upto 40% of your monthly income, then lenders might not be willing to lend you any more money. Its best to clear off some of your loans and then approach for a personal loan.
- No matter how much loan you are eligible for, don’t borrow beyond what you can comfortably repay. After all, its you who has to repay the loan to the lender and not the other way round.
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