Are you going through a cash crunch-like situation? Are you missing out on a holiday trip with friends because of a shortage of funds? Do you lack funds for remodelling the house? If you say yes within, you must avail personal loan today. Personal lending is one of the most appropriate options that shields during any emergency and empowers you to cater to your requirements. Having said this, you must have complete clarity about personal loans before you get one.
You mustn’t face any unpleasant surprises that hamper your entire finances. This post talks about the top questions you must ask before applying for a personal loan.
Why Do I Need a Personal Loan Now?
This is one of the most important questions you must ask before applying for a loan. You need to know the real purpose of having a personal loan. You must answer yourself whether you actually need the money to cater to your emergency needs or whatever expenses you have lined up for.
For example, if you are planning for personal lending just to venture in the stock market, it would be a devastating idea, especially if you have an unstable source of income. On the contrary, if it is funding your child’s education, better treatment, or paying for home remodelling, choosing a personal loan is a wise decision.
What About the Rate of Interest and Tenure?
The interest rate and tenure play an important role in deciding whether to opt for the loan. Although interest rate varies from bank to bank, if you have a low credit score or income instability, there might be a great difference in the rate of interest.
Also, ask about the tenure of the loan amount. Keep in mind that the longer the tenure, the more than the repayment amount on interest and vice-versa. So, always make sure to move with minimum tenure for your loan.
What are the Charges You Need to Pay?
HDFC bank personal loan or from any other lending institutions levy upfront and hidden charges on the application. You must ask about all the charges you need to pay initially.
Some of the common charges are processing fees, penalty fees in case of EMI default, foreclosure fees, etc. Apart from these, you need to ask the lender whether you need to pay any additional charges during or at the end of the loan tenure.
Is it Pre-approved, or Does It Need Documentation?
Nowadays, there is a trend of pre-approved loans that are usually credited to the borrower’s account ins just 10 seconds. On the other hand, there are options where you need to submit all essential documents to avail the loan.
In pre-approved loans, you don’t need to take the hassle of verifying the profile, credit or CIBIL score check, income stability and others because the lender already has all this information. But for documentation-based loans, you will have to go through the entire process.
Apart from the questions above, you should also determine other questions, and one of the most crucial ones is whether you can repay the loan amount through EMIs. After having satisfactory answers, you should move ahead with the lender and avail of Irrespective of the lender you choose; always ask questions to get a transparent picture. You can also share your thoughts with us regarding the post below in the comment section.