People take out personal loans more than any other type of loan. One of the main reasons that a personal loan is so popular is that lenders do not limit how the money can be used. This is not the case with other loans. The person who has taken the loan can use the money for any purpose they have.
People usually take out personal loans to pay for unforeseen expenses, medical emergencies, weddings or other festivities. Personal loans are also often used as down payments on a house or car, to make home improvements or buy furniture for the home. To get the best deals on instant personal loans, a borrower must know and follow specific rules, which are examined in this article.
Features of Personal Loans
- A personal loan does not need any collateral and the application process has less paperwork.
- After the verification process, a personal loan can be approved in as little as 48 hours.
- Personal loans help people get money, but they have interest rates.
- There are no limits on how the money from the personal loan can be used.
10 Tips to Get the Best Deals on Personal Loans
Applying for the right loan amount is important. Loan amounts should be based on how much one can comfortably pay back in the future. So, figure out your actual needs before deciding how much to borrow. Here are some tips to get the best deals on a personal loan.
- Find Out the Interest Rate
Borrowers can check the interest rates and conditions of personal loans by visiting the websites of different lenders. This can help applicants get a good deal on a personal loan. EMI calculators can help select the best options.
- Conduct Proper Research Before Applying For a Personal Loan
Banks, NBFCs and fintech companies offer personal loans, but the terms and conditions differ between traditional and fintech companies. Banks and NBFCs may provide loans at low interest rates. Some borrowers may not qualify due to specified rules, but there may be better deals from other lenders. It is a good idea to use an online aggregator to compare the personal loan‘s terms, interest rates and fees.
- Keep a Good Credit Score
Personal loans are unstructured credit. Thus lenders evaluate applicants’ credit scores to determine their trustworthiness. Since credit scores range from 300 to 900, 750 is usually a good score. If anyone’s credit score is low, they might not get a loan or a higher interest rate. Paying EMIs and credit card bills regularly or on time can help keep the credit score high.
- Choose Short-Term Loans
Longer tenure loans may easily tempt borrowers due to lower EMIs. But these loans will cost more in the long run because the interest will continue to be added to the monthly balance. Personal loans with short terms keep the total amount in check. Also, personal loan calculators can help applicants determine which options are best.
- Ensure Regular Repayments
Regular and on-time payments help keep a good credit history and keep late payments and other fees. Also, a bad review could make it harder to get another loan.
- Avoid Multiple Lenders
If a borrower talks to more than one lender at the same time, it could lead to more than one inquiry. It looks like the borrower desperately needs money, which may not be good, and lenders could be less likely to lend money. So, it is best to look into and compare the eligibility requirements of different lenders and only go to those whose requirements match.
- Beware of Plans With No Interest
Some lenders work with lifestyle or consumer goods stores to offer 0% EMI plans to entice people to borrow money. Borrowers often pay interest because they do not know about the high costs and processing fees until the last minute.
- Foreclosure Charges
Foreclosure charges or early payments are also necessary when choosing a lender. Borrowers can sometimes pay off their loans early, but the foreclosures or prepayment fees are not worth it. To avoid being let down in the future, one must find out important details ahead of time or choose vendors who do not charge for prepayment.
- Check For Hidden Costs
Find out if there are any processing fees, late payment fees or other hidden or built-in fees that can increase the total cost of a loan. If so, put these costs in the budget or figure out how to avoid them.
- Avoid Advance EMIs
When an EMI is paid early, the interest rate goes up, and the borrower will pay more than what is shown. Some lenders may ask borrowers to pay advance EMIs before the loan is paid out. It is wise to stay away from advanced EMIs and look for banks or personal loan apps that only require regular payments.
How to Apply for Instant Personal Loans?
The benefits and features of an instant personal loan give people relief in an emergency. This is shown by how easy it is to apply for a personal loan online. There are only five steps to do this.
Step 1: Go to the ‘Loan’ section, and click on ‘Apply Now.’
Step 2: Enter the basic information and upload the documents needed for a personal loan.
Step 3: Wait for the application to be checked and evaluated.
Step 4: Get the confirmation of approval.
Step 5: Approve and authorise the online disbursement of the personal loan.
Getting a personal loan is rather easy. Since people do not have to put anything up as security for these loans, personal loans are one of the most common types of loans in India due to their many benefits. Many companies also offer people personal loans. That is why choosing the right bank for your personal loan is important so you can get the best deal on your instant personal loan. For further information and useful blogs like this one, visit Piramal Finance to know more about instant personal loans and other important financial information and services.