Many of you will surely agree on the fact that whenever a financial emergency comes, going for a personal loan is one of the most popular options for many to get the required funds.
However, one thing that needs to be mentioned here is the fact that with the high-rise popularity of this unsecured loan, it has become the need of an hour. But before you decide to go for this credit facility, it is important that you should be aware of some factors. Well, rather we should say that people make mistakes while applying for this unsecured loan, which in result lead to rejection. Thus, in order to avoid such a situation, an applicant needs to be aware of those mistakes.
So, without wasting any time further, let’s just discuss what are those mistakes that one should avoid in the article below.
Not Checking Your Credit Score
It is important that one should check his three-digit summary prior availing the loan as lenders usually check the score of the applicants in order to evaluate his creditworthiness. If an individual does not have a good score, there are high chances of rejection. So, checking the same allows an applicant to know whether he has a good score or not as far as applying for a loan is concerned.
Applying for Multiple Loans
When people are looking for funds to meet their immediate needs, they tend to apply for an online personal loan from too many lenders. So, when a lender processes your application, a hard enquiry is made, which will reflect on your report. And, if too many rejections are found in the report, it could ultimately hurt your score, which is ofcourse, not good for you. However, one thing that needs to be mentioned here is the fact that the lenders would assume that you are credit hungry, hence hesitate to grant you the credit.
Not Reading the Fine Print
Don’t fall prey to false promises and instead of believing on something verbally, go through the terms and conditions. Check the final fine print carefully and read each and every clause so as to avoid any last minute hassle. If the terms are not favourable to your repayment, take the final decision and choose an ideal lender, meeting your requirements.
Opting for Longer Tenure
Many borrowers while availing the loan usually opt for a longer tenure in order to pay smaller EMIs. But they forget that doing so could increase their debt burden, hence they end up paying more on the Interest. Longer tenures mean higher repayment burden,which people don’t realize so easily. So, try to opt for smaller tenures along with lowest personal loan interest rates, though your EMIs would increase but you can save more on Interest repayment, hence your overall debt also decreases.
Not Checking the Eligibility Criteria
When it comes to availing this unsecured loan, it is important for the borrowers to check the personal loan eligibility, which is based on many factors such as age, income, employment, credit score and so on. Though different banks have different norms, so one should check the same to avoid the last minute hassle.