PERSONAL LOAN TIPS
PERSONAL LOAN TIPS
Now, due to the easy availability of personal loans from banks as well as non-banking financial companies (NBFCs), people face a lot of problems and face difficulty in choosing the right lender to reduce costs and optimize benefits. Does matter. Here are some tips for doing this.
The first and most important tip is to check your credit score at any credit information bureau like CIBIL before applying for any loan. Your credit score is the starting point for the lender to help determine if you can safely service the personal loan being applied. A CIBIL credit score of 750 and above is generally acceptable to lenders as most loans are given to a person with this minimum qualifying credit score. So unless you have a minimum qualifying credit score, it makes no sense for you to apply for a personal loan as it is possible to get the application rejected.
Before you check your credit score and apply for a personal loan, you should do thorough research about the various personal loans available in the market. There are various websites like http://www.cubitfin.com where you can find the details of different providers of personal loans. While doing this research you need to find out who is offering a personal loan for your tenure, for which you want the maximum tenure of a personal loan to vary between different lenders. You also have to understand the processing fees charged by various lenders to process your loan application. You should also do in-depth research on various terms and conditions related to prepayment charge as it is the major cost after interest cost.
Since personal loans run at very high interest rates, you should meet your personal loan requirement properly. The need for a personal loan should come with detailed work rather than just estimation work. A good estimate of the need for a personal loan should be neither on the higher side nor on the lower side. This practice will help you reduce the cost of the interest that you pay on a personal loan as well as to avoid the payment of prepayment fees that would be levied in the event that you repay your personal loan before your term is. Some lenders allow you to prepay your personal loan only after paying some installments. There are other lenders who give you part of your personal loan every year up to a certain percentage of the outstanding balance. So if you are not sure about the tenure under which you will be able to pay back the loan, then it is good to choose lenders who provide you such flexibility in prepayment of the loan.
Generally lenders do not allow you to make two personal loans at the same time. So if you are already servicing a personal loan, you are less likely to have another. So make sure that there is a difference of at least six months between the two applications for a personal loan.
Eligibility for a personal loan depends on your ability to make certain payments every month. So if you are not initially able to get a personal loan within the tenure you have chosen and since the lenders do not allow any joint borrower except in the case of a wedding loan, then you have the only option to increase your eligibility. Personal loan has a long tenure.
Since your loan amount eligibility is also dependent on the amount of any current liability, it is advisable to pay all your credit cards outstanding in case you carry forward the outstanding credit card as permitted by the credit card issuer. .
Deciding on the tenure of a personal loan is the most difficult part of the whole process because if you opt for a longer tenure then you either pay interest for a longer period or for a longer period otherwise you will have to pay the prepayment penalty. If you opt for a shorter tenure then it can cause stress on your cash resources as a result of higher monthly EMI (EMI). It can also sometimes affect your credit score and credit history. So do deep calculations and discussions on the amount that you can do comfortably from month to month.
As banks typically charge a processing fee to process your loan application, which adds to your costs, you will be able to reduce this cost if you have a good credit score as well as an existing relationship with the lender Are. The processing fee is negotiable and may even be completely waived if you have strong credentials and negotiation skills.
This is to avail the loan facility from your existing bank as it reduces the processing time of the application. Check with your current banker if they have any personal loan product for you and also check if you are a bank's preferred customer.
Since interest is the most important cost component of a personal loan, it is very important for you to understand the interest rate mechanism. Whether it is fixed rate or floating rate. It is important to understand how interest on personal loans is charged. In the case of flat rate, interest is paid over the entire amount of the loan during the entire duration of the loan, which is not paid for EMI payments. You should opt for the loan where the interest is charged, reducing the balance of the loan rather than the principal amount of the loan.
While filling the application form, it is very important that you fill all the details correctly. Be honest with every detail you present. Do not create any documents or details. This can cost you dearly, sometimes even in jail, if the misinformation materializes. Please fill out the entire form yourself instead of signing on the dotted lines.
This is the most important tip. As in marketing. Do not trust the promises made by the representative verbally to you. Insist on written confirmation for all benefits or concessions you have given.
Considering your total cost, work on the rate of interest as well as the processing fee you may have to pay before paying it to a particular lender at zero.
last but not the least. Always read the application form thoroughly. If fine prints are not fully digestible, use a magnifying glass if necessary. If you do not understand the fine print, seek the help of someone who can help you.
PERSONAL LOAN TIPS?