For umpteen reasons, you can take the help of a personal loan. It can help you fund your large purchase and meet any emergency expenses. You can repay the loan in equated monthly instalments for up to 60 months. It is one flexible tenor that would provide comfort while you repay the amount. A personal loan may not be the only option for 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 for a personal loan to get the best use and advantages. 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 interest rate. Every financial institution checks factors like creditworthiness or the borrower’s income before determining the borrower’s interest rate. If you get a lower rate of interest, then you will have lower EMI and short loan tenure.
Credit score calculator
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, the higher the chances of loan approval. Moreover, the sanctioned loan amount and the loan terms depend largely on the credit score. If you have a score above 750, applying for a loan is an excellent idea. In that case, you will get several terms and conditions.
Prepayment facility and charges calculator
There can be some situations where you need finance urgently. Not only that, but you also have the confidence that you can repay the loan quickly. You can save a lot by indulging in prepayment, especially if you do the full amount relatively before the tenor of the loan.
Monthly EMI calculator
You will need to pay the borrowed amount monthly. You can do it in the form of equated monthly instalments. Therefore, before you take any personal loan, you must 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 and the regular expenses. It would be best if you did it without affecting 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 loans 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 use a personal loan calculator to calculate the monthly instalment you need to pay. However, some financial institutions offer a high prepayment penalty and a processing fee. Ensure you check for all this before applying for the loan amount.