10 Important Elements to Consider Before Taking A Personal Loan

Posted in INTERESTING       8 Aug 2019       167      

10 Important Elements to Consider Before Taking A Personal Loan

1. Interest Rate

The first thing before thinking of taking any loan you should see is the interest rate whether it isa car loan, home loan, credit cards, or personal loan. Your monthly EMI is dependent on the interest rate. Compare interest rates and opt for one offering lowest.

2. Loan Tenure

Usually, the tenure for personal loans is 1-5 years. Consider for a loan with shorter tenure since a longer tenure results to more EMI and higher interests. You need to decide the tenure of the loan according to your capabilities to pay monthly EMI. If you can pay higher EMI monthly then it will come with less interest and will be over soon.

3. Additional and Other Charges

There are many hidden costs associated with loans. A better credit score empowers you to negotiate on processing fees and other charges. Have good communication with the representative of the money lending company and ask every doubt you have like a little child.

4. Your Income

Your income is an important factor to be considered while you are taking personal by the lender. It determines your repaying capacity and current financial standing. Whether you are working at a firm or own a business, your income plays a significant role while availing cash or personal loan.

5. Pre-payment Flexibility

Early repayment can help you eliminate your debt obligation. Apply for one with low or no pre-payment charges. If you own a business then you should always go for the loans which have pre-payment flexibility as you may more profit in the future and you can settle the loan before the end of the tenure. If you are at a job and you are expecting a rise in your salary then go for such option.

6. Company You Work At

If you are working at some company or a firm then money lenders categorize employers based on the size of the company you work at. Your secured job gives them a sense of security. Working at a reputed firm or company may get you personal loans faster.

7. Job Term

Money lending services analyze your job term at the current job. Longer the time span, the better it is for loan approval. If your job has a limited tenure then it may be hard for you getting loans.

8. Your Current Economic Status

Loan approval is quicker if you are settled and have bright earning prospects. The lender may not be hesitant to lend you some money. If you have loan history and you have settled your previous loans or paying regular EMI of current loans then it shows your string economic status.

9. Customer Service

Look for a lender or bank with high standards of customer service. A team which is equipped to solve all your queries can create a pleasant experience.

10. Terms & Conditions

Although nobody reads the terms and conditions while installing an app or signing up for new websites. But while you want to avail a personal loan, you need to read all the terms & conditions before signing the loan agreement. Clarify your doubts with the lender if any and make an informed decision.





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