Tips To Make Your First Personal Loan Application a Success from NBFCs

If it is your first Personal Loan application, the process can get a bit confusing and appear complicated to you. This blog will help you understand a few things to clear this confusion before you apply for your first instant Personal Loan. Before applying for a Personal Loan, you need to keep a few things in mind. Today, many lenders offer Personal Loans with various terms and conditions. Understanding and comparing those requirements from different lenders will help you get an affordable loan with a lower interest rate. Lack of awareness about the requirements and basic information about a Personal Loan can lead to financial mishaps. After comparing all the lenders, you can find out the one that is suitable for your requirements. You can check the Personal Loan eligibility criteria and apply for an instant Personal Loan. Here are a few tips that you should keep in mind before your first Personal Loan application:

1. Research

First and foremost, before applying for an instant Personal Loan, you should do proper research which includes the verification of the lender. You should read a few blogs and articles plus check the information provided on the lender’s website. Going through the lender’s website will help you get the basic credentials of the lender and whether the lender is trustworthy and an authority in the field.

2. Evaluating your loan requirement

Creating a checklist before applying for a Personal Loan will help you understand all your requirements and those of the lender. But first of all, you must understand why you are applying for a loan; whether it is for the long term or short term, what is the purpose of the loan and what your repayment options are. Evaluating your loan requirement will help in better management of your financials.

3. Credit score

A credit score or a CIBIL score is a three-digit number ranging between 300 and 900 that signifies the creditworthiness of the borrower. With a good credit score, you have a fair chance to get a higher loan amount with a lower interest rate. A credit score above 750 is considered a good credit score. If you are a first-time borrower, you might not have a credit history. In that case, your credit report will reflect as NTC (New to Credit).

4. Check eligibility criteria

To avail of an instant Personal Loan, you have to meet certain Personal Loan eligibility criteria as mentioned on the lender’s website. Such Personal Loan eligibility criteria include age, income, employment status and experience, etc. Before applying for a loan, it is better to make sure you fulfil these criteria.

5. Compare the interest rate

Different lenders offer a Personal Loan at varying interest rates. The interest rate provided by a lender depends on internal policies and other market scenarios. As a smart first-time borrower, you must compare various lenders and choose the one with the most suitable rate of interest. As aforementioned, a good credit score will help you in availing of a Personal Loan with a lower interest rate. A good credit score gives confidence to the lender that you are likely to repay the loan on time. This will help you negotiate a lower rate of interest, a higher loan amount and flexible repayment tenure.

6. Avoid multiple loans

One of the common mistakes that a first-time borrower can make is taking multiple loans at the same time. No doubt a Personal Loan helps you tackle your urgent financial requirements but taking too many loans can impact your day-to-day finances.

7. Check loan tenure

Tenure is the time given to the borrower to repay the loan. The time is pre-decided before signing the final documents. A borrower can choose the desired tenure to repay the loan. Also, you can try and use an EMI calculator to check the exact schedule timeline of your repayment. It helps you track your repayment better along with your monthly EMIs.

8. Check for additional charges

During the disbursement of a Personal Loan, there could be various charges levied by the lender such as processing fees, documentation fees and other types of fees. Also, there could be pre-payment charges in case you wish to close your loan before the completion of the tenure. As a first-time borrower, you must be aware of the additional charges while you are applying for a loan. Lastly, before signing the final documents, you must read all the documents carefully.

Conclusion

If you follow the above-mentioned points, your first-time loan application, usage and repayment experience will be a smooth one. A loan is an excellent financial instrument to achieve personal, professional or business goals. Follow the right steps and you will be able to fully utilize this instrument to your advantage.

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