A 5-point checklist to keep in mind before applying for personal loans

applying for personal loans

Personal loans have become a very reliable option for many. They offer a financial helping hand in trying times. With one, you can cover most of life’s major events with ease. Whether it’s a wedding in the family, a medical emergency or some travel plans that need financial aid, you can turn to personal finance for the support you need. They will provide the funds and ensure things go as planned.

However, considering that personal finance is synonymous with large amounts of money, you need to take all things into consideration to ensure you come out of debt successfully. We will try to contribute to a smooth experience with debt by providing you an important 5-point checklist that you must go over before applying for your personal loan.

1. Credit rating checks.

Before you apply, check your credit rating. It is one of the most important factors when applying for personal loans. It affects your eligibility, how fast your loan is approved and the even the interest rates of your loan. Sometimes, there might be printing errors or some wrong entries in the credit rating that will negatively impact your credit score. You’ll need to ensure all the entries are right and if there any errors get them corrected before applying. If your score is below 700, try and boost it before applying.

2. Calculate eligibility.

Remember to check your eligibility before applying. If you do not take out time to check your eligibility, you could apply for the wrong loan amount and your application could be rejected. This will be a roadblock in your planning that will cause major disappointment and will also cost you as the processing fees will not be returned.

3. Calculate EMIs in advance.

There is a difference between being eligible and being able to afford a loan amount. Sometimes, your loan amount might be approved but when the EMIs start, you’ll find it extremely difficult to handle the installments. Therefore, before you borrow personal loans, you should always check the EMIs to see if they are viable for you or not. If not, you would have to borrow a smaller loan amount. You can check you EMIs quickly and easily by utilizing one of the many online EMI calculators.

4. Check charges.

Many focus so much on interest rates that they forget that personal loans have other charges. These can be quite substantial and need to be looked into. Every lender will have its own set of charges, how long the list is and the quantum of each charge will be different from the next lender. All this makes it of the utmost importance to check charges before applying for a personal loan.

5. Read terms and conditions.

Lastly, go through the terms and conditions like your life depend on it. The last thing you want is to be surprised by some hidden charges or costs that went unnoticed in the terms and conditions. If you have even the slightest of doubts, take it up with the lender before you move ahead!

We hope this has been helpful. Good luck and all the best!