Why are Personal Loans the favorite of people all over India? The primary reason is that borrowers need not mention the purpose of the loans. Banks do not ask either. As long as you do not use the personal loan for illegal purposes, it is okay. People apply for Personal Loans to fund their vacations, wedding, making down payment of car loan or Home Loan, and so on.
Personal Loans are unsecured loans. It is also one of the reasons for its growing popularity. The borrower does not have to provide any collateral. Documentation is easy when compared to other loans. Nowadays, people can apply for Personal Loan online. These tips will help you get the cheapest personal loan online.
1. Do You Need a Personal Loan?
You should ask this question before you Apply for Personal Loans Online. Remember, the Personal Loan is one of the most expensive loans. Assess your requirement as you end up with a commitment to pay the EMIs (Equated Monthly Instalments) on time. It is not a wise decision if you have unpaid Credit Card bills and you opt for a Personal Loan to go on a vacation. Put your money to more productive use.
2. Research Well
There are hundreds of lenders in the market. Do not blindly accept the first offer that comes your way. Do your research with the help of loan service providers like http://www.mymoneymantra.com. You can get a good deal when you compare various products on a single screen.
3. Your Credit Score Matters a Lot
Banks consider a score of around 700 to 750 as acceptable when dealing with Personal Loans. The risks involved in a Personal Loan are higher because they are unsecured loans. Hence, banks prefer borrowers with high credit scores. Check your credit score before you apply for Personal Loan online. You will get a fair idea.
4. Lower the Credit Score – Higher is the Interest Rate
People with low credit score can also find lenders. However, the rates of interest on such loans are bound to be high. Banks usually do not approve Personal Loans for borrowers with a low credit rating. In case they do, you might not get the amount you expect to get.
5. Compare the Rate of Interest
Usually, the rate of interest on Personal Loans is higher. Compare the different products of various banks before you decide to take a Personal Loan. Check up with the lenders online and opt for the one that offers the best rate of interest. At the same time, compare other features like processing fees and so on. Banks have loan campaigns when they waive processing fees and other charges. It is better to apply for Personal Loan during such loan campaigns.
6. Confirm Your Eligibility
The benefit of applying online is that you can check out your eligibility. Use the eligibility calculator online to verify your eligibility. Be honest with your submission because the banks will not miss anything. Your income is the deciding factor. You should also account for your other loan liabilities. Banks usually prescribe a take-home pay of at least 50% after account for all your EMIs including the proposed Personal Loan EMI.
7. Check Out the Prepayment Clauses
Some banks do not allow prepayment of personal loans whereas some of them charge a penalty in the range of 2% to 4%. Check out these factors beforehand. Opt for the Personal Loan that allows you to make a prepayment. You end up saving a lot of money.
8. Refrain from Applying for Multiple Loans
People tend to apply for multiple Personal Loans within short intervals. Remember that banks check your credit history. A high number of inquiries within a short time can make lenders feel that you are desperate for funds. It affects your credit score and causes it to dip. It is not beneficial as you would find it difficult to get Personal Loans in the future.
9. Double Check Your Credit Report
Your credit report can have inaccuracies that can affect your credit score. Do a thorough check of your credit report and proceed to rectify the errors. Inaccurate entries in your credit report can result in rejection of the personal loan. It can also reduce your credit score further thereby making it difficult to apply for Personal Loans in the future.
10. Maintain a Gap of 6 Months Between 2 Personal Loan Applications:
In case of a rejection, wait for 6 months before reapplying for the Personal Loan. Use the intervening period to repair your credit score. Clear your outstanding payments and improve your credit history.
Also Read: 10 Tips for a Successful Personal Loan Application
These 10 tips should prove handy to get the cheapest Personal Loan online.
To apply online for Credit Cards, Secured Loans and Unsecured Loans, visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 60+ Banks and NBFCs. We have served 2 million+ happy customers since 1989.
Talk to our Loan Specialists toll-free at 1800 103 4004 to know more about our products and offers.