5 Personal Loan Tips You Must Follow in 2021

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Personal loans help you tick off short-term expenses. This can include an upcoming wedding, a vacation or a home makeover. The leading Indian bank makes sure the loans are disbursed without any hassle and within a short time frame. Work with a bank that offers up to ₹40 lakhs, interest rates starting at 10.49% and a top-up facility. State-of-the-art customer service by financial experts will help you meet diverse needs.

The application procedure is extremely easy. Getting personal loans have been further accelerated with the introduction of e-banking. But there are a few handy tips to follow while working with unsecured loans. Knowing them can help you make the best of your loan.

1.     The Right Bank

It is crucial to research the product before applying it. Choose a bank that offers convenient facilities to ease the process. It must also be able to process the request quickly.

Below are a few other factors to check:

  • Easy documentation like a valid KYC, bank statements and eSign
  • Pocket-friendly charges you can afford
  • Minimum eligibility like loan without PAN card for salaried and self-employed individuals

Make sure the bank does not require collateral or security. It must be solely disbursed at their discretion based on your creditworthiness. No co-signer or guarantor must be needed.

2.     Short Term Loan

Pick a short payback tenure that will help you clear the loan quickly. You can also reduce the loan burden by closing it early and focus on other existing debts. The leading banks offer a minimum tenure starting at 12 months. However, you will have to pay higher EMIs. Make sure you have arranged the finances accordingly.

3.     Avoid Several Loans at Once

It can increase your possibilities of being a defaulter. This is a warning sign for banks. They can end up making several ‘hard enquiries’ to understand your risk status as a borrower. This does not hamper your credit score. But the loan request can be turned down. Further, it could be difficult to manage the EMIs of several loans simultaneously. Overall, it is a good idea to clear a few debts like a travel loan at least before taking a personal loan.

4.     A Good Credit Profile

The top Indian banks offer unsecured loans. This means you do not have to offer assets for security purposes. But this means borrowers must have an impressive credit score. The bank will depend on this figure to determine your eligibility. So, try to pay your monthly bills on time, check for update errors and opt for credit-builder loans. These will reduce the chances of a personal loan application getting declined.

5.     Make Timely EMI Payments

Be it secured and unsecured loans, banks expect you to repay the amount on time. Otherwise, you will have to pay penalties that can be an added pressure. The credit score is also affected if you are unable to make regular payments on the right date. This reduces your chances of getting future loans approved. You can set up a reminder to simply set up auto payments to never miss an instalment and keep a clean history.

Check the pre-payment charges. Try to pick a bank whose eligibility and documentation needs are easy to fulfil. Make sure the other charges are minimum. All these will help you have a great loan experience.