The answers to these questions can help you make the best decisions regarding an instant personal loan. We always have answers to our questions and doubts, if correctly acknowledged! Similarly, at the time of borrowing, before your loan provider checks your eligibility, you should ask yourself a few questions and seek answers to them. Do you have the financial capacity to pay the monthly EMI? It is one such question and there are many more added to the list.
Debt is a financial burden and a long-term relationship, where you need to be as serious as you are about entering into a relationship with your partner. These questions will clear your doubts, and also boost your confidence before you borrow.
The moment you find the answers to the questions are not confirmed or positive, you are not at the right phase of life to borrow. Restrict yourself and if you need money, you can probably use some other ways other than borrowing. So, let’s not fret anymore and straight away look into the top 6 questions to ask yourself at the time of borrowing.
- What is my credit eligibility?
You owe it to yourself to check your credit history and credit score. The higher your credit score, the lower the interest rate you will qualify for. To start, the most essential thing will be to check your credit score. This comes prior to everything else that you may figure out. A credit score is a measure of an individual’s ability to pay back a borrowed amount. The range starts from 300-900, and a score above 750 puts the ball in your court. An individual with a good credit score is always eligible for a good amount of loan sanction, a low rate of interest, and definitely quick approval. So, if your answer to this question is yes, you are good to go for a personal loan apply online.
- Is it necessary to borrow?
The most essential question should be whether it is necessary to borrow at all. Borrowing is not a handy option and should be avoided under all circumstances. There are various means of arranging funds, and borrowing should be the last option on the plate. With borrowing comes extra expenses, debt burden, financial commitment, and extra charges. If you are sure that you are borrowing for a crisis, and there are no better ways to obtain funds, you are good to go. Until you know how to manage finances responsibly, you shouldn’t be in any kind of debt trap or nuisance.
- How much money should you borrow?
Now, the need and amount sanctioned are never the same. While you need 1 lakh rupees, you may be eligible for 5 lakhs. This does not mean you will be opting for a loan of more than 1 lakh rupees. It is always recommended to borrow the exact or approximate amount that you need. Borrowing less or more has negative consequences and you should not deal with any of them. Be sure about the number of funds, so that it is sufficient but not extra, as every penny will cost you a rate of interest.
- What should be the EMI?
This is not less than a million-dollar question. EMI is always the most important aspect when it comes to borrowing. An EMI is the amount of money that you need to pay for the repayment of a loan every month. It adds to the rate of interest as well. It is important to decide the EMI according to your financial capacity and you must not settle for a high amount if you are not able to pay it. Understand your repayment capacity with an instant personal loan calculator and then decide the EMI.
- What are the charges to look for?
If you are borrowing, you need an affordable loan. This should be the foremost consideration that an individual must have. The charges are different for various loan providers and financial institutions. It depends on you how well you research and then settle for the right financial institution. If you need a low-cost loan, you need to choose a financial institution with minimal charges and no hidden ones. Some of the common ones are foreclosure charges, prepayment charges, late fees, bounce charges, and default charges. This is important and you need to bag a deal that has the lowest ones.
- What should be the rate of interest?
A rate of interest is not a fixed component. It tends to change with eligibility, loan amount, and financial institutions, to be precise. The rate of interest is subject to change, and you need to negotiate till you find a suitable deal. A low rate of interest makes your EMI low and you can easily pay off your loan. This will be a good deal, and you need it.
Wrapping up
Before you initiate the personal loan apply online process, you need to ask yourself these questions. An instant personal loan is definitely the best way to meet all your financial needs on the same day. For a perfect borrowing experience, do use a personal loan calculator.
