Personal loans have emerged as an effective financial option for individuals living in metropolitan cities such as Chennai. These loans are used to fund several purposes such as medical requirements, vacations, desired home renovations, among many more uses.
Individuals should however look out for fundamental mistakes they commit when availing a personal loan in Chennai. Keeping these mistakes under check will help an individual avail the most beneficial personal loan offers in the metropolitan city.
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7 things to consider before availing a personal loan
Applicants seeking personal loans often overlook certain factors that ultimately affect their finances in the long run. Keeping the following 7 things in mind will enable them to identify the mistakes to avoid while applying for a personal loan –
- Compare Between Lenders
Financial institutions offer personal loans at different rates of interest catering to individuals from various backgrounds. Applicants should research on the interest rates offered by lenders in the housing credit market to avail the most affordable personal loans.
- Credit Score
Individuals with a CIBIL score of 750 and above are eligible for personal loans. Potential borrowers often attempt to avail personal loans without taking their credit score and report into consideration. Applicants should check up on their CIBIL Information Report (CIR) before applying for a personal loan in Chennai.
- Uncertainty Regarding Loan Amount
Individuals should first identify their financial needs to gauge the required loan amount. Personal loans are leveraged to fulfil multiple purposes. Borrowers comprehensively use such loans to meet credit card debts or make high-value expenses such as home renovation, emergency medical situation, etc. Applicants should, therefore, plan their finances ahead of availing such loans. As personal loans are unsecured and accrue interests higher than secured loans, taking a higher amount than necessary will impose excessive repayment burden on an applicant.
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- Choosing Longer Tenors
Applicants of a personal loan often select longer tenors to reduce the chance of repayment. While longer tenors significantly reduce the EMI repayment and personal loan interest rates, the interest pay-out is ultimately greater by the end of the long tenor.
- Repayment Of Existing Loans
Lenders prefer individuals who lack debt obligations in the present. Applicants who are still servicing existing loans have a higher debt-to-income ratio will find it challenging to avail instant personal loans. Lenders consider individuals with a high debt-to-income ratio as just as high-risk borrowers and hesitate to approve loans. Individuals should, thus, repay their existing loans to reduce the debt repayment burden with respect to monthly income.
- Overlooking Lenders’ Credibility
Consulting reviews from customers of a financial institution will enable an individual to analyse the credibility of lenders. Applicants can also contact the lenders through the information provided online to measure their credibility before seeking loans.
- Excess Charges
Individuals should choose lenders which charge negligible management and processing fees when availing a personal loan. Select lenders who levy marginal prepayment charges on individuals who want to go beyond the loan repayment tenor and opt for loan prepayment.
Residents of Chennai, thus, should consider the above mentioned pointers before seeking a personal loan. Various NBFCs like Bajaj Finserv offer personal loans up to Rs.25 lakh, extending instant approval and quick disbursals as well. This financial institution also saves the customer’s valuable time by providing pre-approved offers on financial products such as personal loans, business loans, home loans and numerous other products, which make the loan application process easier.
You can check your pre-approved offer just by providing your name and contact number.Applicants who want to reap the maximum benefits of bajaj finserv personal loans should actively avoid these mistakes to ultimately increase their eligibility of availing a personal loan. Know about pre-approved personal loans and avail one if you are eligible at predetermined competitive rates.