4 Questions You Should Ask Before Taking a Personal Loan

Personal Loan

In the 21st century, everything is moving at breakneck speed. With inflation going up and income levels coming down, fulfilling your dreams has gotten tougher than before.  Opportunities presented today may not be available again in the future.

If such thoughts make your mind heavy, then worry no more, as you can now apply for a Fullerton India personal loan online and pay conveniently in the years to come. Undoubtedly, the best time to make purchases of almost any kind is now, as the festive season brings with it discounts, cashback, and other incredible offers.  

But, before checking personal loan eligibility and hitting the apply button, you need to have concrete answers to a few answers. These answers can help you to refine your decision.

The Top 4 Questions You Need to Answer

Question 1 – Why Do You Need the Loan?

A personal loan comes under the unsecured category of loans. Hence, you do not need to pledge any asset. All you need to do is check the personal loan eligibility and apply online or offline.

Despite its unsecured nature, non-payment of personal loan dues can impact you in many ways. It can reduce your credit score drastically. Moreover, you can get a legal notice from the lender’s legal cell. Additionally, the lender may impose a hefty penalty.

To avoid such possibilities, it is better to ponder over why you need the loan. 

It is advisable that you apply for a personal loan only when you know that you can repay it on time. Alternatively, you may modify the loan amount depending on your requirements.

You may apply for a personal loan online for various reasons. A personal loan can offer you easy finance when you wish to buy a property, renovate your house, set-up a business, pay medical bills, purchase a motor vehicle, or intend to travel abroad. 

Before determining the amount you need, it is wise to calculate the total cost of the loan and act accordingly.

Question 2 – Are You Eligible?

Generally, personal loan eligibility criteria are the simplest among all loan types. You can consider yourself eligible if you have Indian citizenship and your age is above 21 but below 64. Additionally, the lender may need income proof to check whether you qualify their income parameters or not.

Besides the general requirements, the lender also looks at your credit score. As you apply for a personal loan without a mortgage, a healthy income is a must. And, your credit score not only reflects your financial health but also allows the lender to dig into your financial history.

As the eligibility criteria may differ from lender to lender, you should check the personal loan eligibility calculator for exploring the latest rules.

Question 3 – Do You Have the Documents Ready?

To apply for a personal loan online or offline, you need to keep a few documents handy. The list of documents keeps on changing, and you must keep an eye for the most updated information. 

Broadly, all lenders require the following documents:

  • Identity proof, like PAN Card
  • Address proof, like Aadhaar Card
  • Proof of income – salary slips for salaried; profit and loss statement for self-employed
  • Six-months’ Bank Account Statement
  • Photographs
  • Loan application fees

Other than these, the lender may request a few more documents. If you apply for a personal loan online, you can upload the documents on the lender’s portal or app and wait for the loan’s approval.

Question 4 – What is the Repayment Term?

The loan term plays a significant role in determining your EMIs. Personal loans come with a loan term between one year and five years.

If you choose a longer tenure, your EMIs may be less, but you have to pay more as interest. If you can afford to pay more, it is prudent to apply for a short-term personal loan. By doing so, you can clear off the debt earlier and achieve the debt-free milestone. 

Also, knowing a little about the interest type can go a long way in saving money. Usually, the floating rate of interest is 1-2% lesser than the fixed rate. However, it also exposes you to market fluctuation.

Hence, before applying for a personal loan online, you should evaluate the loan term and the interest types carefully to save money.

Conclusion

Realizing your dreams can get easier when you apply for a personal loan online. You do not have to touch your savings, and yet see your dreams come into shape. Ensure that you read all loan terms before signing on the dotted line. 

Related posts

Is NIO a Good Stock to Buy?

Akarsh Shekhar

Understanding the Term ‘Insurance’: Its History, Gene Testing, Claims, Premiums, Control and Regulation

Rashmi Poddar

Facebook faces biggest single-day drop in Share Price in the US history

Rashmi Poddar