Guage the loan amount you need to take
Find out the loan repayment tenor in advance
Ask about the rate of interest and other charges
Decide whether to take a loan from a bank or NBFC
An unsecured mode of finance, personal loans serve multiple objectives. Be it going on a vacation, undertaking home renovation, buying an expensive household item or funding marriage related expenses, a personal loan is a prudent financing option. However, there are certain questions you need to ask before availing this loan.
Prior to availing a personal loan, it’s essential for you to figure out the loan amount. Gauge your needs to know your exact requirement. Being an unsecured loan, your credit score plays a critical role in determining the loan amount. Opt for a loan that you can repay easily without compromising on your other financial goals. Ideally, the EMIs shouldn’t be more than 40% of your monthly income.
The tenor varies across lenders. Most lenders offer flexible tenors to ensure you can repay the loan as per your convenience. Compare the tenors offered by various lenders online before taking a call and opt for the one that best aligns with your goals and repayment capacity. The tenor you choose affects your monthly EMIs. To estimate monthly EMIs, you can use Personal Loan Calculator and plan your tenor accordingly.
This is another vital question you need to ask before availing an online personal loan. The rate of interest has a say on the monthly EMIs. Compare interest rates offered by different lenders online before taking a final decision. The rate of interest depends on your credit score, loan amount and tenor among others.
Flexi Loan Explained
While earlier, banks were the primary source for personal lending, today many non-banking finance companies (NBFCs) are also offering personal loans. Adopting an innovative approach, some of the leading NBFCs are offering flexi personal loans, where you need to pay interest only on the amount you utilise from your approved loan limit.
If you are serving any pre-existing loan, the same will have a direct impact on your repayment capability. Lenders will factor this while sanctioning the loan amount. While applying for a personal loan when you are serving pre-existing loans and liabilities, make sure you’ve paid the EMIs of the present loans on time.
Additional Read: Things to Avoid While Taking Personal Loans
Comparing various offerings along with understanding the fine print of the loan document will help you get a good deal.