Why should you apply for a personal loan before you apply for a home loan?
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Why should you apply for a personal loan before you apply for a home loan?

  • Highlights

  • Avail a personal loan to develop repayment discipline

  • Get a pre-approved home loan from the same lender

  • Repay the loan on time to boost your credit score

  • Take a Bajaj Finserv Personal Loan for additional benefits

A personal loan can help you finance a range of personal needs such as buying a new car or paying for your child’s higher education. A home loan, on the other hand, helps you buy the dream home for your family without feeling the financial strain. While both these loans may seem unrelated, taking a personal loan before you take a home loan offers several benefits. Here are three reasons why you should do this.

To learn repayment discipline

Defaulting on a loan attracts penal interest, which puts an additional burden on your finances. So, it is wise not to take any chances with a home loan. Take a small personal loan to learn repayment discipline first. Most lenders will sanction this personal loan at low rate of interest, which means you will have to pay nominal EMIs. Once you start repaying this loan, you will build repayment discipline and learn how to manage your finances despite the additional outflow.

This will hold you in good stead when you apply for a home loan where the EMIs are higher and you have to make payments for a longer tenor.

To benefit from pre-approved offers if you’re borrowing from the same lender

Taking a personal loan before taking a home loan will allow you to avail the latter more easily, especially if you approach the same lender. Once you give your details to the lender when taking a personal loan, you don’t have to re-submit this information. You simply have to supply the additional details while applying for a home loan. This means that you can also speed up the rate at which you get a home loan by taking a personal loan first. Additionally, when you successfully repay your personal loan without delaying an EMI payment, your lender is more likely to give you a home loan on better and more affordable terms.

Additional Read: Questions You Should Be Asking Before Availing a Personal Loan

Lenders like Bajaj Finserv give you up to Rs.25 lakh as a personal loan with benefits like minimum documentation, easy eligibility and low rate of interest. So, you can take this loan to fund your lifestyle needs in the interim, and simplify matters for when you are taking take a home loan.

Flexi Loan Explained

To improve your credit score

When you take a home loan, you want a high loan amount that will allow you to buy the home of your choice. But, to get such a substantial amount of funds, you will have to ensure that you have a good credit score. If you have no credit history, lenders will not be able to assess your past repayment behaviour and may be hesitant to give you a home loan. So, you can take a personal loan, use it responsibly and repay it on time to build your credit score. This will prove that you are responsible with credit and hence, are a good candidate for a home loan. You will not only be able to negotiate a high loan amount, but you will also be in a better position to negotiate a lower rate of interest.

These are some reasons why it is beneficial to borrow a personal loan before you apply for a home loan. But, before doing so, make sure that you have the means to repay this loan. This will ensure that your borrowing experience is hassle-free and works in your favour when taking a home loan in the future.

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