6 Questions You Need to Ask Before Getting a Personal Loan

When you need urgent funds, and without bothering about pledging any collateral or security, you are viable to avail of an online personal loan. They are an affordable method to get funds to cover several personal expenses. For example, you can borrow cash loans to consolidate debts, control home revamping costs, or plan a dream marriage. Yet, a loan borrower must have complete transparency about these unsecured loans. This is essential to bypass any undesirable surprises. Going through all terms and conditions may be time-taking, but this is a necessary start towards a promising financial future.

1) What do I need to borrow the Loan?

That's the very first question you need to ask yourself. Next, you must analyze and question yourself if you require funds for a crisis need or something optional that can pose a risk. Again, it's best to have self-awareness so that you do not regret it in the future. For example, borrowing funds for investing in the stock market may not be a good idea if your source of income is not stable. But, on the other hand, it could be a good solution in case of a medical emergency or bridge a small gap and realize a long-awaited dream, such as the downpayment on your home loan or children's education.?

2) What is my Loan Eligibility?

Personal loan eligibility criteria differ from individual to individual. A few of the primary standards are the stability of your income source and the amount of disposable revenue. In addition, your credit score must be good. A Few other factors like your age, credit history, work experience are also considered.

3) Lender Related Assurance

Many financiers offer personal loans at attractive rates and exciting features. Sometimes it is even tempting to accept a personal loan using one of the new loan apps on your mobile phone, which claims to give the best possible deals. But you need to know who exactly is offering to lend to you. It is advisable to find out the lender’s experience in this field, and the experience people have had with the lender. Going with a lender registered with the RBI with a comprehensive physical presence and robust technical support would be advisable. It is also essential to carefully go through the terms and conditions before signing any loan agreement to know precisely how much EMI you are supposed to pay and how long.??

4) EMI Affordability

Interest rate is undoubtedly a critical factor when it comes to personal loans. However, be aware of the hidden charges in the loan, which may increase your overall cost of the loan. You can get a good idea of your monthly EMI by calculating it yourself on any online website. With this, you can choose at a reasonable time so that the monthly EMI fits within your budget.?

5) Other Charges

Personal loans charge prepayment fines. This is a fee set by lenders if you wish to pay off your loan early or transfer out the balance of your ongoing loan to a different lender. Personal loans also come with additional charges over and above the interest rate, including processing fees, service fees, and insurance charges. Therefore, it is essential to check the costs before you sign up. Penalty charges may also be levied in case of cheque bounce or late / missed payments.

6) Documentation List

The lender needs specific documents to process your loan application to get a quick cash loan. So it is better if you ask for the entire document list required to avoid wasting your time. If you are trying to opt for an online loan, we advise you to assemble the documents, scan them, and prepare them for upload, including KYC documents, PAN, salary slips for the last three months for salaried individuals, and bank statements for the previous three months.