9 mistakes to avoid while applying for a Personal Loan
Anita is an independent woman and works in a consulting firm, she likes to travel the world and enjoys the best of gadgets. It is her 25th birthday and she wants to go on a solo Europe trip to enjoy the occasion, while she has saved a bit of money, she needs some amount to pursue this cherished dream of hers. She doesn’t want to ask her family or friends and wants to arrange this amount on her own. This is where she thought of a personal loan. Here are the 9 mistakes someone like Anita should avoid while applying for a personal loan.
1. Not having a clear purpose
Having a clear purpose is very important as without a clear goal one tends to misuse the amount and which results in a habit of not respecting the money and eventually also results in repayment defaults, and every little default affects the credit bureau scores. Thus, a lender always tries to establish if the personal loan applicant has a clear purpose for applying for the same.
2. Wrongly Applying with Local DSAs
A lot of individuals think of applying through the local DSA’s as they seem friendly and helpful, it, however, creates a major problem as the DSA’s create multiple applications and send files to multiple lenders which reduces the credit bureau score of an individual as a result of multiple screenings.
3. Making Multiple Applications
Applying with multiple lenders is another concern as it results in a reduced credit bureau score just as in the case with the DSAs and it impacts all future personal loan applications. So instead of thinking that multiple applications will result in an approval for the personal loan. It is recommended to apply for an online personal loan in India with the top personal loan enablers like LoansJagat.com.
4. Not Checking Terms and Conditions
On several occasions the applicants are in a hurry and they do not bother to check the terms and conditions that the bank lenders have. Also, the fact that these terms and conditions are buried under loads of papers makes them seem not so critical. However, some of these terms are very critical for instance an applicant needs to know if a lender charges extra for prepayment of their personal loan, as that becomes a critical factor at the time of repayments. However, one gets complete transparency when they apply for an online personal loan in India with the top fintech players like LoansJagat.com.
5. Not Evaluating Interest Rates
Many a time, applicants do not evaluate the interest rate and look for the fastest personal loan option without considering the repercussions. Even half a per cent difference in the interest rate can be a difference of thousands of Rupees on the overall amount of repayments. Thus, apply for an online personal loan in India with LoansJagat.com, it compares the interest rate from the best lenders for your personal loan.
6. Forgot to Evaluate Processing Fee
Processing fee is the one-time amount one has to pay for getting their personal loan sanctioned and this amount varies for every lender. Thus, one has to clearly understand the processing fee and its cost implications. LoansJagat.com provides clear visibility of the processing fee of the top lenders.
7. Not Having a Clear Credit History
A lot of us do not give enough thought to the small credit card bills and other such repayments, eventually, it reduces the credit bureau score with top bureaus like CIBIL, which eventually reduces the chances of getting a personal loan in the future.
8. Overlooked Total Cost of Loan
An applicant needs to consider the total cost of loan that includes interest rate, processing fee and any other charge that a personal loan might have and not just the monthly EMI one has to pay. A bad calculation might mean paying much more than what the actual loan amount was and thus one should apply for an online personal loan in India with top fintech players like LoansJagat.com to get a complete understanding of their personal loan.
9. Forgot To Apply Online
As mentioned in above points, there is a clear benefit in applying the
personal loan online as it not just protects the credit bureau score from
getting a hit with every application but also gives a clear indication of the
total amount, interest and other terms which are needed to take an informed
decision to go for the best fit personal loan.