Whether you’re planning a dream vacation, preparing for a wedding, renovating your home or covering emergency expenses, a personal loan could be helpful to meet such big expenses. One of the most appealing aspects of personal loans is that they don’t require collateral. But, before diving into the process of securing a personal loan, it’s important to understand the key considerations that can make a significant difference.
Moneycontrol provides access to fully digital and instant personal loans of up to Rs 50 lakhs, offering a seamless experience without the burden of paperwork or high processing fees. With the convenience of quick fund transfer directly to your bank account, the process is simple and efficient. The interest rates for the personal loans on Moneycontrol app and website begin at as low as 12% per annum.
Tips to obtain your loan with confidence and peace of mind.
Only take a loan if and when necessaryBefore applying for a personal loan, it’s important to evaluate your needs and current financial obligations. While a personal loan can be a convenient way to fund immediate expenses, it's important to remember that it comes with a long-term commitment. This means you'll need to make consistent monthly payments that could stretch over years. Before moving forward, make sure your budget can comfortably absorb these additional payments without impacting your financial stability. Taking on debt irresponsibly can lead to financial strain and missed payments that could damage your credit score.
Assess your financials and loan details before applyingPersonal loans in India have been rapidly evolving with lenders offering flexible borrowing options to meet the needs for loan seekers across categories. It’s easy to get lured into seemingly lucrative loan offers without carefully examining the fine print. So, a thorough research is an essential step. Take time to compare key factors such as interest rates, repayment terms, processing fees and any other hidden charges. Understand the different personal loan types and the total cost over the loan tenure, as well as the flexibility of repayment options.
Look for best interest ratesAs personal loans don’t require any collateral, their rates can be steep. So, it’s very important to shop around for the best interest rates. Even a slight difference in interest rates can have a large impact on the total amount paid during the specified tenure. It’s advisable to compare offers from different lenders and explore the various personal loan types, such as a personal loan on salary, to find the option that best suits your needs. If you have a strong credit score and a solid financial profile, you may qualify for lower interest rates. Moneycontrol, in collaboration with seven top lenders, provides access to instant loans with interest rates starting from 10.5% per annum, and no hidden fees. You can apply for a personal loan of up to Rs 50 lakhs through the Moneycontrol app and website in a 100% paperless process.
Understand and meet eligibility requirementsLenders assess factors such as your income level and credit score to determine your suitability for the loan and the amount you can borrow. When exploring personal loan types, such as a personal loan on salary, it’s important to understand how different options may impact your eligibility and borrowing capacity. The higher your income and credit score, the better your chances of securing a personal loan in India with favourable terms. Make sure to review the specific criteria of each lender and confirm your eligibility before applying.
Maintain a high credit scoreYour credit score is a key factor that lenders use to determine your eligibility for a personal loan and the terms they offer. For those seeking a personal loan for salaried employees, a score of 750 or higher is considered excellent and places you in the best position for securing the lowest possible interest rates and favourable loan terms. On the flip side, a low score can limit your options, making it harder to get approved for a personal loan in India. It’s a good idea to review your credit report before applying and, if needed, take steps to improve the credit score.
Watch out for hidden feesWhile interest rates and repayment terms are essential, they aren't the only factors to consider when choosing a personal loan. Be cautious of additional costs such as processing fees, prepayment charges and late payment penalties. These can add up quickly and affect the affordability of your loan.
Be aware of prepayment chargesPrepaying your personal loan can help reduce your interest costs and free you from the debt sooner. But not all lenders offer this option, and those that do often include prepayment penalties. Before signing on the dotted line, carefully review the prepayment terms and conditions.
Ensure timely paymentsOnce you take a personal loan, making consistent, timely repayments is crucial. Late or missed payments can lead to penalties, higher interest charges and even damage your credit score. Staying on top of your payment schedule not only helps you avoid these penalties but also contributes to maintaining a strong credit profile.
Consider shorter loan tenureWhile longer repayment periods and lower EMIs can seem attractive, they come with a hidden cost — higher total interest paid over time. Opting for shorter loan tenure, even with slightly higher EMIs, can save you a significant amount in interest and help you pay off your debt faster.
While the idea of a personal loan may sound straightforward, being aware of the best practices can set you up for a hassle-free borrowing and repayments without default.
Accessing a personal loan has never been more convenient than with Moneycontrol’s 100% digital and instant loan service. With flexible options tailored to your employment status and transparent interest rates starting at 10.5% per annum, you can be sure that there are no hidden fees.
From maintaining a high credit score to getting the best interest rates, these essential tips will help you secure a personal loan confidently and manage repayments effectively.
Disclaimer
This piece/article was written by an external partner and does not reflect the work of Moneycontrol's editorial team. It may include references to products and services offered by Moneycontrol.
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