According to the data collected from the Reserve Bank of India in 2018, there was 26.9% of the steady increase in the number of personal loans availed. The data thus points towards the growing popularity of advances like an instant personal loan. Their accompanying benefits like minimum documentation requirement, simple eligibility criteria, immediate approval and more add to their popularity.
Increasing market competition has also made these loans affordable, and you can avail the advances at competitive interest rates and charges.
Top financial institutions offer such beneficial features accompanying a best personal loan interest rate to eligible applicants. However, an individual should consider avoiding a few mistakes before applying for a personal loan. They are as follows –
- Not comparing lenders – Personal loans can be availed in case of emergency or to suffice basic financial requirements. An individual should check the credibility of their lender and the offer extended to them before applying for such advances. Without checking different parameters like interest rates, tenor, an individual might end up availing a loan which is not feasible according to their repayment capacity.
- Applying without considering requirements – Applying without carefully going through the necessary eligibility requirements can result in a declined application. It not only makes availing financing difficult but also affects your credit score negatively, thus reducing your chances of future approval.
- Not verifying your eligibility – Before applying for an instant personal loan, it is vital to check the eligibility criteria. An applicant’s eligibility can affect their process of availing the loan.The basic criteria are –
- The borrower should be an Indian resident.
- An applicant should be aged between 23 years to 55 years of age.
- An individual should be employed with an MNC, private or public organisation.
Other than the basic criteria, an individual should check their CIBIL score before applying for a personal loan. It is a 3-digit expression which determines an individual’s creditworthiness. A CIBIL score around or above 750 is a basic personal loan eligibility criteria most top lenders will consider for approval.
- Borrowing more than you need – An individual should refrain from applying for a loan more than their requirements. It increases their repayment liability in the form of interest added on the amount borrowed in excess of funding needs along with higher EMI payments. It thus results in unnecessary strain on the finances.
- Accepting preliminary tenor and EMI terms – You may come across attractive offers that have pre-decided tenor and affordable EMIs. However, such options may not necessarily prove affordable in the long run. Individuals availing a personal loan must, therefore, calculate their personal loan EMIs and choose tenor as per their repayment capacity.
Financial institutions offer loan EMI calculators to help you compute a suitable tenor and an EMI amount that is conveniently payable as a fixed monthly liability.
- Submitting your application form with haste – An individual should go through their loan application form thoroughly before submitting it for errors. Note that such errors may also lead to a rejected loan application.
- Withholding existing loan details – Before availing an instant personal loan, a borrower should not withhold information regarding their existing obligations. Concealing information regarding existing loans will adversely lead to rejection of their loan application and further affect an individual’s CIBIL score.
- Not checking the charges – Among the mistakes an individual should avoid while applying for a personal loan is not going through the charges. Financial institutions will apply processing fees, foreclosure charges, administrative fees, etc. over their instant personal loan.
Lenders like Bajaj Finserv make sure all charges on their instant personal loan are transparent for the borrower, eliminating the risk of hidden charges. They also offer numerous other borrower-friendly features as well as competitive interest rates.
Additionally, they provide pre-approved offers which help the borrower avail a loan at the most beneficial terms. These policies apply to both secured and unsecured loans, including advances like personal loans, business loans, credit cards, etc. You can check your pre-approved offer by sharing a few essential details.
Avoiding a few mistakes before applying for an instant personal loan, an individual can avail a loan sufficing their requirements. Applying for a feasible loan also helps in timely repayment, which positively influences a borrower’s CIBIL score.