- Date : 26/10/2022
- Read: 5 mins
Top 5 Dos and Dont's that you should be aware of while applying for an instant personal loan from a Bank or NBFC
Today, earning money or the arrangement of instant personal loan is not a problem. You can apply for a instant personal loan within minutes or seconds. Do you think it's crazy? Yes it is, we live in a country where the more than 60% of the population lies in the age group of 18-32 years of age, who can demand & consume more than any other country.
This simply means our country has a healthy Money Flow System due to the balance between demand & supply. We all have bank accounts in mostly private banks like ICICI Bank, Axis Bank, HDFC Bank, etc.
If you have maintained good transactions or bank balance in your account, then most of the banks/NBFCs usually provide you with instant pre approved personal loan and its disbursement with a single click in seconds.
Yes, you got it right. Anyone can avail or apply for the instant personal loan. Now, there must be a lot of questions popping up in your head about the eligibility, interest rates, processing fees, loan duration, repayment terms & conditions etc.
Do not worry, here are the Top 5 Dos and Dont's that you should be aware of while applying for an instant personal loan from a Bank or NBFC like Bajaj Finserv, Dhani, etc.
1. Eligibilty Criteria:
- To avail any instant personal loan or any credit card, any lender would evaluate your CIBIL score, your monthly take home income, your credit worthiness, your bank balance & your employment status.
- They would ask for the necessary documents like your Payslips, your address proof etc as may be necessary to evaluate your eligibility for the loan.
2. Interest Rates:
- Personal loan attracts higher interest rates as compared to home loans or vehicle loans, etc. You should always evaluate the interest rate at which you are applying for a loan, either on the app or through your relationship manager.
- Do not take personal loans which attract higher interest rates of 15% p.a. or greater. You can lookout for the loans having interest rate ranges between 11%-13% p.a. on an average.
3. Understand the processing of loan:
- You should have a clear understanding on processing fees, prepayment simulation and monthly payments.
- Always ask or check loan documents carefully to get clarity of terms & conditions and other hidden charges on your loan account.
4. Pick the tenure carefully:
- You should always be careful while selecting tenure of the loan, as it totally depends on your monthly income and repayment capacity.
- Higher the tenure, lesser EMIs amount and higher interest charges over the period & vice versa.
- Click here for personal loan calculator
5. Differentiate between long term and short-term fund needs:
- You should always evaluate the need for which funds are required. If the need is short term say 30-45 days or fewer, you can apply for a credit card.
- If you need funds for long-term periods, you can look out for personal loans of higher duration.
Related: Best Credit Card Management Apps
1. Do not opt for Higher Interest Rates Burden:
- If you are not eligible for loan, then do not opt for higher interest-bearing loans like 20% p.a. or more, as this will dig deep into your pocket in terms of interest payout.
- Do not apply for a loan without checking interest rates.
2. Do not use Credit Card for Long-Term Funds Requirement:
- Never use short-term loans for your long-term funds requirements, as this will bring you under debt trap and default of payments, which may attract penalties.
3. Do not apply loans with local lender:
- You should never apply for loans with unbranded Partners or NBFCs. Always look out for popular NBFCs or famous brands to enjoy flexibility in terms of terms & conditions.
4. Do not default on loan/credit card payments:
- You should never default on payments on due date, as it will affect your CIBIL score and may attract bounce charges in your bank account. Always pay on time or before time.
5. Do not overspend:
- You should always have a control over your spending habits when you have taken the loan money.
- Your focus should always be on prepayment of loan, instead of overspending using loan money.
While Applying for loan, you should always keep in mind above Dos & Don'ts, so that you get a clear understanding about the funds need, EMI, Tenure and other terms. Always take informed decision in your financial matters without any hurry.