Do’s and don’ts to Follow While Applying for a Gold Loan

Personal loans come along without any security guarantee which means that like in a gold loan one does not have to mortgage gold or any asset in order to get credit. It is provided on the basis of the income level of an individual and further has repayment methods, like monthly EMI. Bandhan Bank personal loan also offers an EMI tenure of 2 months to 36 months approximately

Further, we will take a look at the do’s and don’ts that are to be followed while taking a personal loan

Starting with the right choices and decisions that one should make regarding a personal loan. Here are the dos listed down below:

• Have a specific reason for applying for a Personal Loan- Home loans and car loans are taken for specific needs like buying materialistic assets like a big house or that luxurious branded car. On the contrary personal loans can be taken for any emergency or during any sort of financial crunch. Thus it is essential for a person to have an essential reason behind taking the loan as it has to be repaid to the financial institution. Moreover, there are two main situations when an individual applies for a personal loan. Firstly, when he/she is indebted to someone or many people, secondly, when they are funding for a special requirement.
  
  
• One should always shop for the lowest rate of interest- While repaying the principal amount one also has to pay extra charges, like the interest rate, late fees, etc. As personal loans have a higher rate of interest than gold loans thus it is necessary to have a quick market survey regarding the cheapest interest rates. Interest rates in personal loans range from 10% to 26%, where one has to find a suitable range for themselves. Moreover, some banks offer their already existing clients a lesser interest rate than others.
  
  
• Promotions are meant to take advantage of- While providing personal loans some financial institutions provide interesting disclaimers so as to attract clients. They even provide goodies and gifts as a form of cash discount which is an advantage. It is recommended to avail of these advantages while applying for a personal loan and to make the best utilization of facilities.
  
  
• Match eligibility criteria- Personal loan eligibility chart is provided under the bank’s guidance. Some of the eligibility is to be an Indian citizen and to have salary slips of at least the last two months. Moreover, Loan credit is given on the basis of the salary amount of an individual. Thus to get a personal loan sanctioned, one should check the eligibility criteria beforehand.

Let’s take a look at the things that are considered as don’ts regarding a personal loan:

• Do not skip repayment dates- If you have applied for a monthly EMI repayment tenure then it is recommended not to miss the due dates. It does not only add extra late fees but also affects the credit score in a negative way. Further, a poor credit score will prevent you to get unsecured loans sanctioned. To prevent this problem you can set the tenure of EMI according to your convenience. There are also options available to repay the amount in a ransom and close the account. This benefits the client as he does not have to pay extra charges for an eternity.
  
  
• Do not credit loan for non-essential needs- Just because personal loans are unsecured forms of loans and do not need any collateral does not mean that one can credit loan for unessential purposes. Loans are meant to be financial support during times of emergency. Moreover, the repayment tenure and payment method should be kept in mind.

It should always be remembered that facilities are not meant to be misused or mismanaged. Similarly, personal loans are financial facilities during the ups and downs of one’s life providing essential financial support.