A personal loan is a convenient and popular financing option. It is particularly useful to meet emergent expenses or finance aspirational purchases. Personal loans are not linked to any products or purposes. It is a general and all-purpose loan that you can avail of and use for whatever your needs are. Personal loans are a go-to financing option for individuals who struggle to get through a hard time. With all these loans becoming popular, innovation and technology have paved the way for several instant loan apps. It makes the process of applying for and getting personal loans much simpler.
Though the personal loan app is easy to use and readily available, you should know a few things before taking loans from any personal loan app. Keep yourself well informed about personal loans before applying. It will increase your chances of getting approved quickly and make you well aware of future risks.
Before using a long-term personal loan app, read on to know more about them.
Source of personal loan apps
Personal loan apps are accessible to everyone. These are simple to download from websites and app stores. You must be very cautious about the source from which you download the app. Google Play and the Apple store are reliable platforms where you can get several personal loan apps from various lending institutions. If you want to download from the website, ensure they have a secured URL starting with HTTPS for the borrowers to trust.
Don’t forget to compare the prevailing market interest rates
Always compare the overall market interest rate provided by the different lending institutions. You can get the necessary information from their portals. You can also compare the rates from the websites that list the interest rates offered by the major lending institutions.
Control the borrowing limit
Lenders will always try to tempt you with attractive personal loan offers if you borrow a significant amount. Understand your fund requirements and borrow the amount you need. Do not borrow more than your requirements no matter how attractive the loan offer seems. Remember you need to pay more by way of interest payments if you take a higher loan amount.
Know your CIBIL score before applying for a loan
Before your loan gets approved, all the lenders will go through your CIBIL score. A CIBIL score evaluates the creditworthiness of borrowers and gives an insight into their financial history. A low credit score will increase the chances of loan rejection. So, it is always better to improve your score before opting for a personal loan from the personal loan app. Remember, paying off your dues on time is the best way to maintain an excellent credit score.
Calculate your EMIs well in advance.
Nowadays, several online EMI calculators are available. Using the EMI calculator, calculate the EMI based on your loan amount and tenure. If you opt for a personal loan for longer tenure, the EMI will be lower. Calculating your EMI well in advance will give you an idea of the EMIs to be paid every month and enable you to plan your monthly expenses.
Depending on the lender, several miscellaneous costs are involved with personal loans like GST, processing fees, penalties, etc. So, before you opt for a loan, ensure you get clarity of all the hidden costs.
Staying aware of these tips will help you take the correct loan amount without getting tempted by the offers.