Do’s and Don’ts of Personal Loan in Delhi

The personal loan can help you get quick access to surplus funds that can help you in personal or professional situations. Here are the do’s and don’ts which you need to follow for getting a personal loan. This information will help you get a deeper understanding of factors that should be kept in mind before taking a personal loan.

personal loan


Do’s of a Personal Loan

Some important Do’s in the process of getting a personal loan at attractive interest rates are as follows.

  1. Assessment of your needs for taking a personal loan

It should be the primary step for taking a loan, apply for a personal loan when there is an urgent need, you need to understand your reasons. This will make your thought process simple.

  1. Compare interest rates offered by the various lenders

You should check the interest rates charged by various lenders so that you have a clear idea about what is being offered presently in the market. You can check interest rates on the official websites of various lenders for better comparison. But must ensure interest rate should not be the only factor for deciding the lender.

  1. Check eligibility criteria and documents required

You can check your eligibility criteria and the list of documents required to decide on lenders for comparison. Compare between only those lenders for which you’re eligible.

  1. Maintain debt-to-income ratio

Before applying for a personal loan, take note of your debt-to-income ratio. It is recommended that you keep your debt-to-income ratio below 40% so that there is no negative impact on your credit history. It is crucial to check that you can meet your fixed obligations even after taking a personal loan.

  1. Check the overall cost of the loan

For calculating overall cost need to take into account factors like principal amount, interest rate, prepayment charges, processing fees, and other charges and penalties.

  1. Choose the repayment tenure carefully

It is important to choose the proper loan tenure. A longer tenure means the overall cost of the loan is decreased and the EMIs will be for more time. A shorter tenure indicates an EMI needs to pay for a short duration. The borrower should make sure that the lender does not charge any fees to the borrower in case of prepayment/foreclosure of the loan.

  1. Must choose the right lender

After analyzing all factors like interest rate, penalties, and processing fees and finalizing the loan amount and tenure, now it is time to select the right and reputed lender that meets your current requirements.

  1. Draw a repayment plan

You need to draw up a repayment plan that will help you give clarification on how you plan to return the overall debt because your timely repayment habit will boost your credit score.

Don’ts for getting a Personal Loan

Some important Don’ts in the process of getting a personal loan are as follows.

  1. Ignore your CIBIL score

Ignoring your credit score before applying for a personal loan will become the biggest mistake. It is crucial to know your current credit score, and tips to improve your credit score because it can help you get a personal loan at a lower rate of interest rate.

  1. Applying for too many personal loans

If the applicant applies for too many loans at a single time, then the credit score decreases, and the lender will have a negative image of the borrower. The lender should have an impression that the borrower is credit hungry and that is the reason why the application for too many personal loans must be avoided.

Source- https://articlerockstars.com/dos-and-donts-of-personal-loan-in-delhi/

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