Do's & Don'ts for People Who Want to Get Personal Loan

Posted by Shiv Nanda on May 24th, 2021

Sometimes your emergency funds are also not enough to suffice the amount required for a financial emergency like a wedding going out of budget or higher education fees. A personal loan is an unsecured loan that comes to your aid in such an unforeseen financial crunch. Unlike secured loans like a car loan or home loan, you can take an unsecured personal loan without any guarantee.

Are you planning to take a personal loan? If yes, you can go through our list of some dos and don'ts before applying to improve your chances of getting the loan.

Check out the Do's Before Applying for a Personal Loan

• Borrow for Need Only

You can easily get a personal loan from any instant personal loan app. But Before applying, ask yourself that you are borrowing for your actual need or for something you want, which is a luxury for you. Taking personal loans for your wants and luxury instead of your need will plunge you deep into financial crises.

• Check Lender's Eligibility Criteria

You should first check that you are fulfilling the eligibility criteria of the lender or not. If you apply for a personal loan without checking it, the chances of you getting rejected increases. And every rejection adversely impacts your CIBIL score. So apply in that financial company only, where you fit into their eligibility criteria.

• Compare the Offer

Various banks, financial companies, and instant personal loan apps are providing personal loans. Therefore it would be wise to compare the different aspects of loan like tenure, interest rates, loan amount, processing fees, etc. Then, you should choose a lender whose offers, terms, and conditions suit you.

• Choose Loan Tenure Carefully

If you can't shell out a considerable amount from your pocket every month, choose a lower amount for EMI. But if you can pay a significant amount every month, you should opt for a higher amount as your EMI and repay the loan early. Decide the EMI amount carefully without disturbing your monthly budget.

Here are the Don'ts Before Applying for Personal Loan

• Don't Take All Approved Loan Amount

You might feel tempted to take the maximum loan amount possible. But personal loans come with high-interest rates. Therefore no matter how much loan amount is approved in your case. Only take the loan amount which you need. This way, you will not end up paying a massive amount as the interest of your personal loan.

• Don't Take Personal Loan Without An Emergency

Personal loans are easy to get and are unsecured loans. But you should not apply for the sake of convenience only. They are ideal for any financial emergencies. So please don't make it a habit of taking personal loans for non-essential things.

• Don't Skip to Study the Terms & Conditions

Paperwork for a personal loan doesn't take much time. You can get it instantly from personal loan apps as well. But don't skip the terms and conditions due to haste and laziness. It might cost you in the form of high interest rates or a hefty fee in the loan foreclosure.

• Don't Miss Your EMI Payments

It will help if you plan the monthly instalments according to your budget. If you skip any instalment or multiple EMIs of your loan, your CIBIL score gets badly affected. This will hamper your chances of getting any other loan in the future. Thus take a personal loan only when you are sure of your repayment capacity.

Key Takeaway!

An unsecured personal loan plays the role of your true friend in need. But you should never forget the above-mentioned Do's and Don'ts while applying for the loan. By following these, you can get your personal loan approved quickly, with terms and conditions being in your favour.