First time Loan seekers

Personal Loans

Updated on Jan 2, 2020

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What do I need to remember as a first-time Personal Loan applicant?

1. Check your Credit Score: Your credit score is among the aspects which determines whether you are qualified for a loan, how much loan may be extended for you, and what the rate of interest will be. Chances are you do not know your credit rating, since you're a loan beneficiary. Actually, you may not have a credit history. Ensure you get a fair credit rating; you could examine your credit report using any rating agency for a small fee or free.
2. Understand commonly used Financial Terms: You don't need to be a whiz, but you want to be aware of the basics to be able to pick the right lender. You have to clearly understand what EMI (equated monthly instalment) is and what is the interest part; be aware of the way your loan provider computes the interest for your personal loan Compute the interest rate to understand which suits you the very best so you don't end up paying substantially higher as you didn't do your research!

3. Select the Right Loan Provider: There are several banks and digital lenders now that provide personal loans. So, it is important to evaluate what works for you according to your reason for taking the Personal Loan, the interest rates have been charged, the flexibility of payment that's allowed, the rate at which the loan is disbursed, the repayment exemptions, and foreclosure charges. Also, the time frame in which you want the loan and the transparency at which these companies work.
4. Get your Documents in Place : Keep of your documents handy so your loan amount is disbursed speedily, without difficulty and that your loan is processed in the period. You can get your loan amount on your bank account on the following business day, subject to your documents being accurate; selecting a loan provider which asks you for documentation that is minimum will assist your own case and help in faster disbursal.
5. Know the Other Fees/Charges : Ensure that you are conscious of the processing fees on the loan and how it is computed. Know about the total charges applicable under different garbs to be 100% sure on the loan amount you get and the repayment liability. Loan insurance is an important aspect here! It is an insurance that covers your amount of the loan in case you are unable to finish your repayment for any reason.
Why is a Personal Loan rejected (for a first timer)?
• Credit Score not meeting the requirement of lenders
• Irregular salary crediting
• Your eligibility not meeting the lenders’ criteria
• Inaccurate or incomplete information in your application
• Multiple loan applications or enquiries
So select the lender, research the terms & conditions and be diligent with your documentation. These will go a long way in improving your chances of being accepted for your personal loan!
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