5 points to keep in mind before applying for a personal loan

personal loan application checklist

With the growth of many personal loan lenders, it is easy to secure a personal loan. There are several advantages of a personal loan. As most personal loans are unsecured, you do not need to submit any collateral or asset while borrowing a lump sum capital. Besides, there are advanced features like convenient interest rates, fast approval, and flexible loan terms and conditions, making personal loans one of the preferable funding types among borrowers. You will get an affordable ICICI personal loan interest rate if you apply for funding from ICICI bank.

But borrowing money from a bank or lender comes with the burden of repaying the entire amount with applicable fees and interest. So, before you approach your bank or lender, you should take some time to educate yourself about the financial requirements and the loan terms. Besides, you should use ICICI personal loan calculator to know your EMIs before submitting the loan application. In addition, you also need to keep in mind the below points.

  • Determine your capital requirement

Applying for any fund type is always a daunting decision. So, before you apply for a personal loan, determine your capital needs by evaluating the costs. Many borrowers often take such loans lightly. But, this is incorrect as it is a financial commitment. It is so because you need to repay the money with interest on time. So, make sure that your purpose for the loan application is productive, and then apply.

  • Check your credit score

Check your credit score before applying for a personal loan, as the lending institution pulls up the credit report to determine your eligibility. Remember, the more you send the loan application to different lenders, the more your credit score is inquired. It will negatively affect your credit rating, as the credit score falls for each inquiry. Therefore, you should be clear about the bank’s or lender’s eligibility criteria before submitting the loan application. In that way, you can increase the chance of first-time loan approval and eliminate the requirement to pull up the credit report several times.

  • Consider your overall financial condition

As you might know, the interest rate of personal loans is relatively higher than many other loan types and the repayment period is also short. As you need to repay the amount in Equated Monthly Installments (EMI), you need to have excess funds to meet the repayment costs. For this, you have to consider your overall financial condition to make sure that you can meet the repayment obligations. You can also calculate the loan cost with the assistance of the ICICI personal loan calculator to determine how much money your financial situation permits.

  • Check the repayment terms

As a borrower, you need to keep in mind that if you choose an extended loan repayment period, though you need to pay low EMIs, the interest is higher. That is why it is crucial to settle for a loan tenure that is easily manageable, depending on your financial situation. So, before applying for a personal loan, you should keep in mind this point and check the repayment terms to avoid future complications.

  • Look at all the costs

The interest rate and additional fees can make or break your loan. Though you will get upfront details regarding the interest, there are many hidden charges that you need to pay. The lending institution might ask for bounce, penalties, and processing fees that make an extra burden. Hence, you should take into consideration all the costs before applying.

So, you can see that taking out a loan and repaying it is easy if you properly do your homework. Before approaching a lender or bank, remember the above points to get the best out of your loan. Besides, as mentioned before, you can apply for the loan with details like ICICI personal loan interest rate with the help of Andromeda and our team of experts.