If you want to get a personal loan, here are some important things to consider:
- Considering your general finances
While lending can help you in times of emergency, it is important to understand that the interest rates applicable to them are very high and the repayment costs are low. You will have to pay the amount you borrow from the Estimated Monthly Installments (EMIs), which means you need to have extra money each month to cover the cost of payment.
- Take only what you need
Since it is very easy to get a personal loan and the amount is only taken out in a few minutes or hours, it is easy to move and apply for the higher amount you need. It is important to calculate how much you need for your immediate needs and reduce your borrowing to that amount. City Union Bank personal loan contact number is available on its website, you can anytime call them up for assistance.
- Consider some options
As mentioned earlier, personal loans from banks and financial institutions carry very high-interest rates. If you do not wish to pay high-interest rates, you can always look at other options such as fixed interest rates, stocks, or gold loans. These loans are secured as they are supported by the asset, and interest rates will be significantly lower compared to regular personal loans.
- Find out if you qualify for overdraft facilities
If you have a bank account with which you take out a loan, and if the load is too high, you should ask your lender if they can offer you an overdraft as it will work better than the traditional personal loan.
- Consider borrowing for emergency financing only
Because of how easy it is to get personal loans, many people often take them on vacation or buy a new gadget. It is advisable to stop doing so because your loan should be considered only if you need more money to achieve bigger financial goals.
- The interest rate can be negotiated
If you have a good credit history, you will not have a shortage of lenders who are willing to lend you a personal loan. With banks competing between them, you can always negotiate the personal loan interest rates offered to you. Even a small reduction in interest rates can greatly reduce your debt burden.
- Go through the loan agreement with great care
The loan document should be read carefully and thoroughly to ensure that you are not in a bad mood later. Go through a good print and understand all fees, charges, and penalties. Doing so will ensure that you are familiar with the terms and conditions of your loan, thus helping you to pay on time and clear your credit smoothly and efficiently.
- Think of the consequences if you fail to repay the loan
Failure to repay your loan on time, or failure to repay EMI, could have serious consequences. It is important to understand that late or deferred payments can not only lower your credit score but can also make you an unscrupulous customer in the eyes of the banks you are approaching in the future. Besides, you will face current loan fines, which will increase interest rates, thereby increasing your financial burden.
- Check your credit score before applying
Every time you apply for a personal loan, the lender draws your credit report to determine your eligibility. The higher the number of applications you send to different lenders, the higher your credit report will be. Every time a lender draws your credit report, your credit score falls, however. Before applying for a loan, check your credit score and assess the eligibility of the lender as doing so will ensure that your initial application will be approved, thus eliminating the need to issue your report more often.
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