Top 4 Things to Consider Before Getting a Personal Loan

A personal loan can be a lifesaver when you’re short on funds—whether it’s for an emergency, a wedding, or even a vacation. It's a quick and easy way to get access to funds without dipping into your savings. But before you hit that "Apply Now" button, it’s important to take a step back and look at a few critical aspects that can make or break your borrowing experience.

Here are 4 key things you must consider before applying for a personal loan.

1. Know Exactly Why You Need the Loan

Personal loans are versatile, but that doesn’t mean you should borrow without a clear purpose.

Ask yourself: Why do I need this loan?
Is it to cover unexpected medical bills? Fund a home renovation? Pay for your child’s education? Go on a trip to Europe?

Being specific about your reason helps you:

• Borrow only the amount you truly need


• Choose a tenure that aligns with your financial situation


• Avoid unnecessary financial strain later

Example: If you're renovating your home and expect it to cost Rs. 5 lakh, don’t take a Rs. 10 lakh loan “just in case.” Stick to your budget. Over-borrowing only means higher EMIs and interest outgo.

Bajaj Finance, one of India’s leading financial institutions, offers personal loan of up to Rs. 55 lakh with instant approvals and flexible repayment terms.

2. Check Your Loan Eligibility and Credit Score

Even though a personal loan is unsecured (meaning no collateral needed), lenders still assess your creditworthiness before sanctioning the loan. Your CIBIL score, income, job stability, and existing debt all play a role.

Before applying:

• Check your credit score


• Review your monthly obligations


• Ensure a stable source of income

Many lenders, including Bajaj Finance, offer a simple eligibility check online. You can know in seconds if you qualify—just enter your phone number and OTP to check if you have a pre-approved offer.

3. Understand the Interest Rate and Total Cost of the Loan

A lower interest rate doesn’t always mean a cheaper loan. What you need to look at is the total cost of borrowing, which includes:

• Interest rate (fixed or floating)


• Processing fees


• Prepayment/foreclosure charges


• Late payment penalties


• Any other fees and charges

With Bajaj Finance, you get transparent pricing, flexible tenures (up to 96 months), and zero hidden charges, making it easier to plan your repayments.

Pro Tip: Use the Personal Loan EMI Calculator to figure out your monthly payments before you apply.

Example: A loan of Rs. 3 lakh at 11% for 36 months will have lower EMIs than the same loan for 24 months. But you’ll end up paying more interest overall. Choose based on your monthly affordability vs. long-term interest burden.

4. Choose a Trusted Lender Who Offers Flexibility and Support

Not all personal loans are created equal. Choosing a reputed lender makes a big difference in your experience—during application, repayment, and if any issues arise later.

Here’s what to look for:

• Instant online approval and minimal documents


• Flexible repayment options and part-prepayment facilities


• Strong customer support


• Easy account management through app or portal

With Bajaj Finance, you can apply for a personal loan completely online in just a few minutes. You also get features like:

• Disbursal in 24 hours*


• Online loan account management


• Part-prepayment and foreclosure options with nominal fees

Why it matters: Flexibility to prepay or close your loan early can save you thousands in interest. A helpful customer care team can make repayment smoother, especially during life’s unexpected turns.

Final Thoughts

Getting a personal loan is a big decision—one that can bring immense relief if done right, or financial stress if done hastily. Always take a moment to:

• Set a clear purpose


• Know your eligibility


• Understand the cost


• Choose a trusted lender

Whether it’s Rs. 1 lakh for an urgent need or Rs. 25 lakh for a major life milestone, make your decision with confidence.