We all know that personal loans are a convenient option to cope with financial emergencies. Since they are collateral-free, you can avail one, without pledging any asset as security. Thus, you get to do minimal paperwork, making the loan-process seamless and quick. With technological advancements, most lending institutions offer loans through their apps to avail instant loans.
But there are some factors which you have to look down before opting for the instant loan with any instant loan app. The article lists the essential tips that you may want to keep in mind while availing an instant personal loan just go through the tips.
Factors To Look Before Opting For Loan:-
- Compare Different Lenders- The internet has made it convenient to compare the offerings from leading lending institutions. You can analyse from a variety of options and select the one that best suits your financial needs. You can check their interest rates, loan disbursal time, foreclosure fees or part-prepayment charges. The lender offering the lowest interest rates may not always be the best option. You may want to read consumer reviews and check the experience of previous loan borrowers to form an opinion. Find a lender who is transparent and has a good reputation. Hence, it is always suggested to choose a good lender which is meets your criteria and suitable for all the terms and conditions.
- Loan Agreement In Detail- The loan agreement is the most critical document listing a lender’s terms and conditions. You can find clauses on miscellaneous charges, penalties, consequences of default and other such significant details. When you sign the dotted line, you agree to abide by all the clauses mentioned in the loan agreement. Hence, you must understand these entirely to save yourself from any legal trouble in future. You could consider taking the professional services of a legal expert to help decipher the agreement for better understanding.
- Avoid Multiple Loan Applications- Some emergencies could cause you to rush into applying at many lenders simultaneously. Doing so could harm your credit score and result in the rejection of your loan application. Lenders typically suspect such individuals as credit-hungry and tend to be wary of them. In addition, every loan application elicits a credit report search and multiple entries in a report can bring down your credit score.
- Consider Insurance for High-Value Loans- Credit scores can get negatively impacted if borrowers are unable to repay debts on time. This, in turn, can affect their ability to avail loans in the future. To prevent this, besides chalking out a sound repayment plan, you may want to consider getting insurance coverage for high-value credit. Insurance coverage on personal loans ensures loans are covered in the event of an accident, disability, loss of income or the borrower’s demise. Thus, with insurance coverage, you get financial protection in case of unforeseen situations.
- Borrow what you can Afford- Lastly and most importantly, you may want to limit what you borrow. It may seem tempting to take more credit, especially when you are eligible for it. But, it is wise to calculate your loan amount such that your EMIs do not exceed 15% of your in-hand income. Or, if you have multiple loans, your debt to income ratio must not exceed 40%.
You can apply for an instant personal loan via Bajaj Finserv lending app if you need financial assistance. The app offers seamless loan processing with quick loan disbursement, which makes it one of the best loan apps. You can avail high-value loans of up to Rs.25 lakh and choose a flexible repayment schedule. Besides, there is minimal paperwork, which makes the loan process convenient and hassle-free. You can also apply for a pre-approved offer on your personal loan on this app.