Personal loan is an unsecured loan for which you do not need to pledge anything. Also, this loan is easily available and does not require much formality. This is the reason why despite high interest rates, people choose the option of personal loan in times of need. But after taking a loan, repaying it is a big responsibility. Therefore, often after taking a personal loan, people get upset when they have to pay EMI with higher interest rates. Therefore, before applying for a loan, you should keep these 5 things in mind so that there is no scope for regrets after taking the loan.
Compare Interest Rates
The interest on personal loan can range from 11 percent to 24 percent. Therefore, before taking a loan, you should visit several banks. So that we can compare the interest rates of banks. Take loan from where interest is low. This will reduce your EMI. Keep in mind, the higher the interest, the bigger the EMI will be.
Have A Good Credit Score
Your credit score is also considered at the time of personal loan, so if you are going to apply for a loan, then keep your credit score good. If your credit score is not good then you will get the loan at expensive interest rates. Apart from this, there are some conditions for personal loan like your monthly income should be at least Rs 15,000. Experience in current job should be more than one year etc.
Take As Much Loan As You Can Repay
While taking a personal loan, you should pay maximum attention to your loan amount. Nowadays loan calculators of banks are available on the net, through them you can get an idea of how much EMI will be made on what amount. Decide the loan amount according to the EMI you can easily pay.
Do Not Take Loan For Too Long
A maximum of five years is given to repay the personal loan. Many times people increase the loan tenure in order to reduce the EMI. This only harms you. Your EMI may be small, but you have to pay a lot of interest. Therefore, try that the loan repayment period is not too long.
Pay EMI On Time
If you have taken a loan, then keep in mind to repay its installment on time. If you do not do this, your CIBIL score will deteriorate and your ability to take loan in future will also be affected.
