Top 5 Mistakes to Avoid While Applying For a Personal Loan in Pune
It is a convenient option to take personal loans to meet diverse financial requirements. This proves particularly beneficial when financial emergencies shoot up. Nowadays, with an increased demand for unsecured advances – it is often challenging to obtain a personal loan with the most suitable terms.
Personal loans are the most availed financial advances due to no collateral involved and no end-use restriction. With so many lenders in the market, borrowers often find it challenging to secure a loan with the best possible features and benefits. However, there are certain things that must be avoided while looking for an instant personal loan which can prove to be disadvantageous for a borrower.
Here are 5 mistakes to avoid while applying for a personal loan in Pune –
Not comparing between lenders
Compare the features and benefits on personal loans from multiple lenders in the market before filling out the loan application form. Thoroughly go through the various offerings and check if you can secure a personal loan at an affordable interest rate. Use a personal loan eligibility calculator to determine if you are eligible for a particular loan amount and that the loan fits your budget and caters your financial obligations or not.
For instance, lenders like Bajaj Finserv offer personal loans at competitive rates and with flexible repayment tenor. Further, if you are an existing customer, you can also enjoy pre-approved offers.
Pre-approved offers are applicable on personal loans, business loans, home loans, and numerous other financial products. They streamline the process of availing finances by making the loan processing faster through nominal paperwork. You can check your pre-approved offer by sharing a few necessary details like name and contact number.
Not checking the CIBIL score
As personal loans do not require borrowers to mortgage assets; thus, the CIBIL score plays a pivotal role in determining your loan eligibility. It assures a lender about your capability to repay the loan. A healthy CIBIL score indicates your healthy repayment habit and might prompt lenders to provide you with favourable terms.
Similarly, the opposite also holds true for individuals with a poor credit score. Therefore, verify your credit rating before you start the loan application process.
Not picking the right tenor
Other personal loan mistakes include settling on a loan term without much afterthought, especially agreeing on a shorter repayment tenor. It is advisable to avoid unnecessary higher EMI plans that could make the instalments less affordable. Financial strain may lead to you to default with your loan repayments. Pick a repayment tenor that is reasonable and best caters to your financial portfolio.
Not preparing your budget in advance
Never opt for an advance without preparing a budget beforehand – taking into account your fixed monthly obligations. Never borrow more than you need. Calculate the estimated amount you would require and apply for an advance accordingly. you can calculate your loan EMI using a personal loan calculator. Plus, one of the things to avoid while taking personal loan is not keeping all documents handy before finalising on a loan.
Not checking the associated charges
Most lenders levy fees and charges while disbursing advances. This can be administrative fees, late payment charges, processing fees, foreclosure penalties, etc. Be aware of these along with other hidden charges, if any, when you take a personal loan from your preferred lender.
Read the lender’s terms and conditions carefully and only then proceed with the loan application process. Remember, you can always negotiate with your lender regarding the fee structure. If you have a healthy credit score and repayment ability, negotiate and settle once you are satisfied with the offered terms.
Consider all the available options when opting for an advance and avoid these commonly-made personal loan mistakes. Also, use your credit score and employment status to your advantages in availing a loan on the best repayment terms.