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5 Crucial Things to Keep in Your Mind Before Taking a Loan


In the present-day environment, nothing is certain, whether it be your job, your business, your house or anything. Every aspect of life has become full of uncertainties, and you never know when an emergency would come knocking on your door. You can prepare well for most of the exigencies, but the anticipation of unexpected financial expenses keeps you on your toes, and you feel you can never be prepared well enough.

The requirement could be for education, travel, marriage, hospitalisation, renovation or a number of other possible scenarios. Of course, you have your savings to bank upon, but do you really want to wipe out your entire savings in one go? What would happen after you have exhausted your savings? What is the best option for you in this scenario?

The answer is taking a loan from financial institutions. There are various types of loans available in the market based on your requirements such as a Business Loan, education loan, Home loan, Personal Loan, and so forth. You just need to select one which suits your requirements the most.

 

What are Personal Loans?

 

Personal Loans are an unsecured form of loan that are offered by all financial institution in India to their customers. These loans are processed very quickly and are highly effective in facing any urgent cash requirements. With the rapid integration of internet in the financial sector, it is now straightforward to Find a Personal Loan Offer Online.

You just need to fill an application form, and the whole process would be finalised in a matter of few days. What makes the Personal Loan a preferred option is the fact that you can use the money as per your requirements and need not furnish any information to the lender regarding the usage of the loan amount. You just need to pay your EMIs (Equated Monthly Instalments) on time.

Things to keep in mind before you take a loan

There are various factors you must keep in your mind while you are thinking about applying for a loan. Here are the five most important things that you must keep in mind before you take a loan:

  • Credit Score and Credit History: You need a good credit score and a decent credit history to be eligible for a loan. All lenders have a specified threshold for the credit score, and your credit score must be above the specified threshold for you to be eligible for a loan. Lenders also want that you must have a decent credit history, e., you are a responsible borrower and repay your EMIs on time.

So, before you apply for any loan, it would be a smart decision to check your credit score, and if it is below the required level, you should work towards improving it. Only after your credit score is above the required level should you apply for a loan as then, you will get the lowest interest rates.

 

  • Analyse your requirements: Before you are able to decide regarding the type of loan you need as well as the amount required, you need to assess your requirements. Sit down and carefully analyse different aspects of your requirements and if required take professional help also.

 

You must understand that your loan application would be approved only on the basis of your eligibility, so understand your eligibility and then apply for as much amount as you require. You should not be greedy and apply for the maximum amount, remember what has been taken, must be returned along with interest.

 

  • Conduct thorough research: Before you extend your loan application to a financial institution, you should conduct a thorough investigation regarding the various types of loans available, their interest rates, additional charges, repayment tenure, and so on, and only then take a decision regarding which loan would suit your requirements most.

 

You can conduct your research through online, telephone or personal queries at the office of the preferred lender. Once you are satisfied and have zeroed in on a suitable option, then you should start the application process.

  • Apply online: With the rapid integration of technology in the financial services sector, it has become convenient to find a Personal Loan offer online and applying for the required loan has become very easy. Rather than going through the cumbersome process of filling out multiple forms and letters, you should apply for a loan online.

 

It is the fastest mode of loan application, with most of the lenders approving the application and disbursing the loan within a matter of few days. You just need to fill in the application form, upload the required documents and click on submit button. The lender will take care of the rest of the process.

 

  • Pay your EMIs on time: If you fail to pay your EMIs on time, it could be catastrophic for your future prospects. Not only would it ruin your credit score and credit history, but it would also make you ineligible for any loans in future.

 

So, before you apply for a loan, assess your repayment capacity and take the loan accordingly. Going for a higher amount would mean higher EMIs, and if you cannot pay those EMIs, you will be labelled a defaulter.

Availing a loan is a decision that comes with a lot of responsibilities, you should take your time and do the necessary research before you make a final call.

Also Read: Avoid Making These Mistakes When You Apply for a Personal Loan

To apply online for Credit Cards, Secured Loans and Unsecured Loans, visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 60+ Banks and NBFCs. We have served 2 million+ happy customers since 1989.

Talk to our Loan Specialists toll-free at 1800 103 4004 to know more about our products and offers.

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