For umpteen reasons, you can take the help of a personal loan. It can help you to fund your large purchase as well as meet any emergency expenses. Typically you can repay the loan amount in equated monthly installments in a period of up to 60 months. It is one flexible tenor and would provide you comfort while you repay the amount. A personal loan may not be the only option when it comes to offering you a financial solution. It is one of the viable options as it is way cheaper than other options like credit cards.
Along with that, the convenient application and fast disbursement make it popular among the Indian people. Hence one needs to know how to apply personal loan to get the best use and advantages of it. Moreover, check for the five factors before you apply for the best personal loans.
Tenor and the amount of loan
Before applying for the loan, make sure that you calculate the amount you need and your comfortable tenor to pay back the loan.
Rate of interest
After deciding the loan amount, you must look into the rate of interest. Every financial institution checks some of the factors like creditworthiness or the borrower’s income before deciding the rate of interest of the borrower. If you get a lower rate of interest, then you will have lower EMI and short loan tenor.
The credit score is one major determinant of eligibility. It is a number that speaks about your credit history. The greater the number of your CIBIL score you will have higher the chances of loan approval. Moreover, the sanctioned loan amount along with the loan terms depends largely on the credit score. If you have a score above 750, it is considered an excellent idea to apply for a loan. In that case, you will get several terms and conditions.
Prepayment facility and charges
There can be some situations where you need finance urgently. Not only that, but you also have the confidence that you will be able to pay back the loan quickly. You can save a lot by indulging in prepayment, especially if you do it the full amount relatively before the tenor of the loan.
You will need to pay the borrowed amount monthly. You can do it in the form of equated monthly installments. Therefore before you take any personal loan, you need to estimate the total cash flow and financial applications. Make sure that you analyze the expenditure as well. Also, your monthly income must accommodate the monthly EMI along with the regular expenses. You should do it without putting any effect on your finances. To make it simple, you need to understand that the EMI obligations of your current loan amount should never exceed 40% of the total disposable income. For this reason, you can take the help of an EMI calculator for personal loan to calculate your monthly EMI.
Once you have decided that you need to apply for a personal loan, make sure that you visit any trusted financial partner. Choose a loan option that offers you a low rate of interest. You can also indulge in use of personal loan calculator to calculate the monthly installment that you need to pay. However, some financial institutions offer a high prepayment penalty along with a processing fee. Make sure that you check for all this before applying for the loan amount.