10 basic principles for obtaining personal loans

Delhi, India (NewsView) At some point, one needs personal loan or instant personal loan depending on the immediacy of the requirement. If the need is pressing, an instant personal loan becomes necessary. In situations where the expense is anticipated, a personal loan serves the purpose. Rakesh Kaul, CEO of Clix Capital, says: “Since there are many lenders in the market – banks, NBFCs and fintechs – it is imperative to remember some cardinal criteria to get the best deal. Therefore, potential borrowers should check interest rates, as well as various terms and conditions, by visiting the sites of different lenders. Prior research is also essential to avoid applying to multiple lenders one of which does not meet eligibility standards but triggers difficult inquiries, which can damage a borrower’s credit score and impact chances of getting a personal loan later on more favorable terms. Here are the ten main rules: 1. Check the interest rate One of the most crucial points, this can have an impact on the EMI (monthly equivalent payments) and the duration of the loan. Use a personal loan EMI calculator to decipher the most suitable options. 2. Choose the lender carefully While banks, NBFCs (non-bank financial companies) and fintech entities all offer personal loans, terms and conditions differ between traditional lenders and digital natives. Although banks and NBFCs may claim to offer lower interest rates, certain conditions may not be suitable or a borrower may not qualify due to specific standards. So check all these things beforehand. Also, another lender may have a more suitable offer. Therefore, check the lowest interest rates as well as other fees and conditions through the websites of loan aggregators. 3. Maintain a solid credit rating Personal loans are a form of unsecured credit. Therefore, before approving a loan, lenders will check the applicant’s credit score, which indicates the borrower’s creditworthiness. Since credit scores vary between 300 and 900, a score above 750 is good. A lower score results in either the loan being declined or being approved at a higher interest rate. A healthy score can be maintained by always paying EMIs and credit card bills on time. 4. Avoid Advance EMIs Some lenders require one or two EMIs as an advance from borrowers upon loan disbursement. An EMI advance effectively raises the interest rate and borrowers will end up paying more than what was mentioned. Therefore, avoid early EMIs and choose a personal loan application or a lender that only requires the payment of regular installments. 5. Go for a short term Sometimes borrowers might be tempted to go for a longer term because of low EMIs. But this will result in a higher repayment over the entire term since the outstanding amount bears interest each month. If the EMI is affordable, short terms are a good idea to control the total amount. Again, a personal loan calculator will help you find the best options.

6. Ensure timely repayments Payment of IMEs on time is necessary to ensure that the borrower’s credit rating is not affected and that they do not pay a late payment penalty. Additionally, an unfavorable remark in the credit score could hamper the chances of another loan being approved at some point. 7. Approach only one credible lender As mentioned earlier, approaching different lenders simultaneously can end up with multiple difficult investigations against the borrower. This gives the impression that the individual desperately needs credit. As a result, lenders are cautious about granting a loan to such a person. So check the eligibility criteria of the various lenders and only then approach a lender where the standards are met. 8. Check for hidden charges Find out if there are any processing fees, late payment penalties, and other hidden/built-in charges that can inflate the total spend on any loan. If so, budget for those expenses or figure out how to avoid them. 9. Ask about foreclosure fees Sometimes borrowers are able to prepay a loan. But if the foreclosure or prepayment fees are high, it’s not worth it. One should find the relevant details in advance to avoid disappointment or select a lender with no prepayment charges or only nominal charges. 10. Beware of 0% EMI programs Some lenders might lure borrowers with 0% EMI programs in conjunction with retailers of consumer durables or lifestyle. Here, the high application fees and processing fees are not revealed to buyers or only mentioned at the last moment. Thus, the borrower pays interest unknowingly. If the above guidelines seem somewhat daunting, readers need not worry. They can get a quick and hassle-free online personal loan from Clix Capital. Also, if borrowers have the required documents, an instant personal loan can be disbursed in minutes. Even better, a personal loan can be useful for various purposes. A Clix personal loan can be used to consolidate various debts into one, medical emergencies resulting from unforeseen health events, home renovations, a child’s college or study abroad, wedding expenses or funding a long-awaited vacation, among a plethora of reasons. To be eligible for a Clix personal loan up to INR 10 lakh, applicants must be between 25 and 58 years old and have a credit score of 725 or above. Salaried persons must be earning a minimum monthly income of INR 25,000 while employed in their current company for six months and having at least one year of total work experience. Once KYC details such as Aadhaar and PAN card are quickly cleared via online verification, the sanctioned personal loan amount can be credited to a borrower’s bank account within approximately 15 minutes, subject to conditions. standard. Plus, Clix’s personalized repayment options range from one to four years, ensuring borrowers can repay at their convenience. With instant personal loans from Clix Capital, adhering to the 10 key guidelines given above becomes a piece of cake.


(This story has not been edited by the Devdiscourse team and is auto-generated from a syndicated feed.)

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