Want to Choose the Best Personal Loan? Follow these 5 Tips to be a Smart Borrower
Sponsored Post 02 December 2021
Personal Finance sponsored post
Extending your line of credit comes with quite few risks, if it is not handled properly. However, the risks can be avoided if you make smart financial decisions that protect you from these risks. While this might sound straightforward, it can be difficult to make sound decisions when you need financial help urgently. Mistakes are more likely to be made when you are in a rush or in desperate need for funds.  
 
Many lenders try to take advantage of such situations and entice you with seemingly good terms. But, by availing of Fullerton India personal loan online, this will not be the case. With competitive interest rates, quicker loan disbursal, transparent processes and flexibility, it can suffice your need for funds without endangering your financial security. Despite resorting to a credible lender, it is important to take some steps prior to committing. It is always better to be safe than sorry. Here are five important steps you must take to ensure you are a smart borrower. 
 
5 Tips You Must Take to be a Smart Borrower:
 
No Mistakes in Submitting Documents and Forms
Submitting all your forms and documents in the correct order and in an organized manner may seem like an extremely unhelpful tip. However, given how basic this is, many people take it for granted and end up submitting incomplete documents or unduly filled forms, which can lead to rejection of the application.  By trying to save time when submitting the application, you may end up protracting the approval period a lot more. To avoid this, it is always best to proofread all the documents and forms at least thrice before finally submitting them. 
 
Maintain a High Credit Score
Your creditworthiness is one of the most integral aspects of the loan process and your credit score is a very important metric to measure this. Your credit score is representative of your overall financial behavior and therefore a priority for lenders. Although most individuals are aware of the role it plays, they often forget that you cannot get a good credit score overnight. It is the consistent effort in maintaining your financial health and repaying debt that makes for a stellar credit score.
 
As a result, borrowers who have a credit score of 750 and above, are more likely to get their personal loan application sanctioned in a short period of time. Not just this, an impressive credit score also comes with the benefit of giving you access to lower and better interest rates for your personal loan. 
 
Use a Personal Loan Calculator
Despite the rush you are in, checking your eligibility for a personal loan is essential. In addition to checking the lender’s website or their loan app for parameters, you can also use a personal loan eligibility calculator. A loan calculator is a simple tool that helps you gauge the maximum loan amount you could get based on a few parameters. All you have to do is visit the lender’s website, go to the loan calculator section, and enter the required details. They would include your income, existing debts, interest rate, loan amount, and tenure will be asked of you. You can also use an EMI calculator to get an estimate of the EMI you will have to pay, and then select a tenure so that the EMI amount doesn’t strain your budget. 
 
Ensure all Documents are Handy
Personal loans require very minimal documentation. Some lenders and financial institutions may have some additional requirements, depending on the applicant’s profile and their policy. So, before applying, ensure that you have already checked the lender’s requirements and verify that you have all the documents, and they are all clear and legible. Smudged or blurry scanned copies will most likely lead to your loan application process getting stretched unnecessarily. 
 
Limiting Frequent Applications for Credit
In theory, applying for many loans and committing to whichever takes the least amount of time seems like a good idea. However, this is a bad idea, as it has a negative impact on your credit score.  It is advised to apply for 2 loans at a time, maximum. When you apply for a loan, lenders will most likely raise a hard inquiry. Several such inquiries reflect poorly on your credit score, as it indicated credit hungry behavior. 
 
Taking a personal loan has its fair share of advantages. However, being careful and smart is always a must. Follow the tips mentioned above, and be rest assured that your financial health will be secure!
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