During and after mistakes of personal loan

Learning from the mistakes of others can help you in personal loan moves up quickly in your life. We have put together some like personal loans of the common mistakes that are committed while applying for a personal loan. By knowing all of them or any other loan you can get the best personal loan.

1)  Not checking your credit score 

Checking credit score is very important for a personal loan because the lenders initially check your score to evaluate your creditworthiness related to a personal loan. If you do not have a good credit score or ratings there are chances of rejection or high-interest rates in a loan. You can improve your credit score and avail yourself of personal loans at a good rate.

2) Applying for too many personal loans

This is a misstep when you want funds or any other loan for your immediate needs. In a desperate situation for money, you might tend to apply for a personal loan from too many lenders. When the lender processes your application, a hard inquiry is made which will reflect on your credit report. If too many hard inquiries are made in a personal loan, it could hurt your credit score. Moreover, the lenders would assume you are credit hungry and hesitate to grant you the credit related to a personal loan.

3) Settling for less

Many tend to take a personal loan based on your personal loan or referral or instant approval. Though it is not a bad idea to consider, you might lose out on the best offers when you fail to shop around. Instant approval personal loans might have a higher interest rate where you would have got it at cheaper prices from another lender. Though it may take more time, it could lower your debt burden considerably.

4) Not reading the fine print

The lenders might assure you of a speedy approval and a high loan amount during your application. Don’t fall prey to such promises. Go through the terms and conditions carefully for a personal loan from TATA Capital Personal Loan and be informed about the charges levied upfront. If the terms are not favorable to your repayment capacity, make the right choice in choosing the best loan.

5) Opting for a longer tenure

In order to pay smaller EMIs, you might want to opt for a longer tenure. Smaller loans or any other loan periods help you save more on interest outgo and overall debt burden.

6) Taking a loan without any purpose

A personal loan is advisable to take when you have real financial needs. Taking it for recreational purposes like throwing a party to your friends, going on a vacation, etc. will become a burden later.

7) Not checking eligibility criteria

Different lenders have different eligibility for Personal Loan criteria such as income, age, employment, good credit score, residential location and, etc. Applying for a personal loan or any other loan after checking your eligibility criteria could help you improve your eligibility and get better personal loans.

Conclusion-

Do not ignore alternative loan options, such as secured loan options including top-up home loans, loan against securities, loan against property, and loan against FDs. 

Just like personal loans or any other loan these loans also do not have any end-usage restrictions in a loan and usually come with lower interest rates and longer tenure options than personal loans. For instance, existing home loan borrowers can opt for top-up home loans available at interest rates usually as low as 8% p.a. and tenure which may go up to 30 years or it depends on your personal loan depending on the residual home loan tenure. Similarly, those who have sizable long-term investments can consider availing loans against securities in order to meet their financial shortfalls at lower interest rates without selling their securities.

Read More:- Improving CIBIL Score for Personal Loans