Emergencies come unannounced. At such times, more often than not, a financial crisis ensues. If you find yourself in such a situation, you should consider taking a personal loan. A personal loan is a very handy product that allows you to promptly address a financial emergency. You can also take personal loans to address other issues such as wedding costs, family vacations, etc. If you are about to apply for a personal loan, take a look at the tips and tricks mentioned below to know how you can get the best deal.
1) Explore your options
You may be very comfortable carrying out all your financial transactions with your bank. But did you know that your bank may not be offering you the best personal loan rates? Yes, that is right. Nowadays, excellent personal loans are available from banks as well as NBFCs. You, therefore, need to explore all your options, run comparisons and only then finalize the lender. This will surely help you to locate the best personal loan interest rates.
2) Calculate your credit score
You need to know what your exact credit score is. This is because your credit rating has a direct impact on your personal loan clauses. The higher your credit score is, the lower your personal loan interest rate will be. You can check your CIBIL score online. If your score is above 700, you can apply for the loan right away. Else, you should first try to pay off your outstanding dues, clear your unpaid EMIs and settle a few credit cards to improve your credit ranking before you apply for the loan.
3) Choose a reasonable repayment scheme
Everyone wishes to be debt-free at the earliest. In your hurry to close your loan soon, don’t make the mistake of opting for an unreasonable repayment option. If your EMIs are too large, you will struggle to pay them. This may even lead to loan defaults. Such incidents can seriously damage your credit score and put a lot of financial stress on yours. If you want, you can look at the loan EMI calculator.
4) Make a budget before you borrow
If you are financially stable and you have a good credit score, you will easily get a personal loan. But do not borrow unless you really need to do so. When there is a requirement, make a budge and see exactly how much you need. Apply for a personal loan for a suitable amount. If you borrow more, you will have to repay more and your financial burden will increase unnecessarily.
5) Use the online personal loan calculators
Whether you need to find out the applicable interest rates or you want to check your personal loan eligibility, make use of the online calculators. These tools are easily available online and are free of cost. You will have a better idea of the figures and you will know exactly what to expect from the loan provider when you submit your application form.
7) Read between the lines
Never sign anywhere before reading the loan documents very closely. Read between the lines to understand the fee structure of the loan. Different lenders have different fees and charges and these affect your overall personal loan expenses. So read the documents carefully and only sign if you are fully satisfied with the terms and conditions mentioned here.
Also Read: Easy Ways to Improve your CIBIL Score
The Final Word
Listed above are some of the most practical personal loan tips. Use them effectively to get a good deal on your personal loan. You may need your personal loan for a medical emergency or you may need it to pay for your honeymoon. No matter what the reason, you should always get the loan at the best rate. You can also be eligible for a pre-approved loan offer. Keep the points mentioned above in mind and this will surely happen.