In the unpredictable world nowadays, a person is only sometimes ready for sudden expenses that arrive as surprises. Instant personal loans are the most beneficial option to have a helping hand in these situations. Since they are personal loans, there are no limitations on how the borrower must use the funds. As a result, the borrower is free to spend the money from these loans on any need.
The funds from personal loans may be used for home-related expenses, consolidating debt, or one-time payments. Any health issues the borrower has had are one of the main reasons they are taking out these loans.
A personal loan can give you quick access to money for any purpose. This kind of loan can be issued without the need for collateral. Personal loans are a reliable source of funding for any kind of event, including family weddings, tuition, and unforeseen medical bills.
These will help you understand personal loans in great detail. Additionally, these dos and don’ts will provide you with things to think about just before applying.
Here Are a Few Things you should and should not do when applying for a personal loan:
A Few DOs are:
- Compare Different Loans from Different Lenders
Before taking out any particular loan from the market, a borrower must make sure the loan terms are comparable. It is advisable to check out the interest rates of two loans because personal loans offer higher rates that include the interest as well as the principal. An EMI calculator may be used to check the cost of borrowing a personal loan. Thus, the borrower may generally distinguish between the loans. The lowest interest rate should be chosen by the borrower.
The Best Personal Loan Offers in 2024
Lender | Min Salary (₹/month) | Loan Amount (₹) | Loan Tenure (Months) | Interest Rate (p.a.) | CIBIL Score | Processing Fees |
Paysense | 20,000 | 50,000 – 10,00,000 | 6 – 60 | 18% – 22% (Reducing) | 700+ | 2% – 5% |
Werize | 12,000 | 30,000 – 5,00,000 | 12 – 36 | 15% – 22% (Flat) | 650+ | 3% – 5% |
Money View | 15,000 | 5,000 – 5,00,000 | 3 – 60 | 17% – 36% (Reducing) | 650+ | 1% – 5% |
IDFC Bank | 20,000 | 1,00,000 – 40,00,000 | 12 – 60 | 10.49% – 22% (Reducing) | 700+ | 1% – 4% |
Incred | 15,000 | 50,000 – 10,00,000 | 24 – 60 | 16% – 33% (Reducing) | 650+ | 1% – 5% |
Aditya Birla | 20,000 | 1,00,000 – 50,00,000 | 12 – 84 | 12% – 28% (Reducing) | 650+ | 1% – 4% |
Finnable | 20,000 | 50,000 – 10,00,000 | 12 – 60 | 16.95% – 30% (Reducing) | 700+ | 1% – 5% |
Hero Fincorp | 15,000 | 50,000 – 10,00,000 | 12 – 60 | 9.5% – 16% (Flat) | 700+ | 1% – 5% |
Muthoot Finance | 20,000 | 1,00,000 – 7,50,000 | 12 – 60 | 14% – 22% (Reducing) | 685+ | 1% – 3% |
Upward Fintech | 20,000 | 25,000 – 5,00,000 | 6 – 36 | 18% – 32% (Reducing) | 650+ | 2% – 5% |
Cashe | 12,000 | 10,000 – 4,00,000 | 4 | 1.5% – 3% (Fixed Monthly) | 550+ | 1.5% – 2% |
Finzy | 25,000 | 1,00,000 – 10,00,000 | 6 – 36 | 10.99% – 18.99% (Reducing) | 700+ | 1% – 3% |
Fibe (EarlySalary) | 15,000 | 8,000 – 2,00,000 | 3 – 36 | 15% – 30% (Reducing) | 550+ | 1% – 2% |
Faircent | 25,000 | 50,000 – 10,00,000 | 3 – 36 | 25% – 30% (Reducing) | 700+ | 7% – 9% |
Stashfin | 20,000 | 5,000 – 5,00,000 | 9 – 36 | 2.45% – 4% (Fixed Monthly) | 725+ | 2% – 2% |
Tata Capital | 25,000 | 75,000 – 25,00,000 | 12 – 60 | 10.5% – 14.25% (Reducing) | 720+ | 0.75% – 2% |
Standard Chartered Bank | 50,000 | 1,00,000 – 1,00,00,000 | 12 – 60 | 11.49% – 20% (Reducing) | 740+ | 1% – 3% |
Bajaj Finserv (Prime) | 38,000 | 1,00,000 – 35,00,000 | 12 – 84 | 13.5% – 15% (Reducing) | 685+ | 0.5% – 1.5% |
Axis Bank | 25,000 | 1,00,000 – 40,00,000 | 12 – 60 | 11.15% – 16.25% (Reducing) | 690+ | 1% – 4% |
ICICI Bank | 40,000 | 1,00,000 – 1,00,00,000 | 12 – 72 | 10.5% – 15% (Reducing) | 700+ | 0.5% – 1.5% |
Fullerton | 25,000 | 1,00,000 – 25,00,000 | 12 – 60 | 14% – 32% (Reducing) | 705+ | 1% – 3% |
HDFC Bank | 25,000 | 1,00,000 – 1,00,00,000 | 12 – 72 | 10.25% – 16% (Reducing) | 700+ | 0.5% – 1.5% |
Shubh Life | 12,000 | 5,000 – 2,00,000 | 3 – 24 | 28% – 44% (Reducing) | 650+ | 1% – 3% |
Loan Tap | 12,000 | 50,000 – 7,00,000 | 12 – 36 | 11% – 24% (Reducing) | 675+ | 1% – 2% |
Kreditbee | 16,000 | 1,000 – 3,00,000 | 1 Day – 4 Months | 1.5% – 3% (Fixed Monthly) | 550+ | 5% – 6% |
FlexSalary | 8,000 | 4,000 – 2,00,000 | 6 – 60 | 1.5% – 3% (Fixed Monthly) | 550+ | ₹300 – ₹750 |
mPokket | 9,000 | 500 – 30,000 | 1 Week – 4 Months | 2% – 4% (Fixed Monthly) | 550+ | ₹50 – ₹200 |
Moneywide | 20,000 | 10,000 – 3,00,000 | 3 – 36 | 17% – 24% (Reducing) | 650+ | 1% – 3% |
Insta Money | 15,000 | 5,000 – 25,000 | 1 – 6 | 13% – 36% (Reducing) | 650+ | 1% – 4% |
Kotak Bank | 25,000 | 1,00,000 – 50,00,000 | 12 – 60 | 10.75% – 22% (Reducing) | 705+ | 0.75% – 2.5% |
Cholamandalam | 20,000 | 1,00,000 – 35,00,000 | 6 – 60 | 14% – 22% (Reducing) | 675+ | 1% – 3% |
SBM | 20,000 | 50,000 – 25,00,000 | 6 – 60 | 14% – 20% (Reducing) | 700+ | 1% – 4% |
- Selecting a Tenure
Selecting an appropriate loan tenure is crucial. A longer tenure results in higher EMIs and a lower total cost of the loan. Conversely, a shorter tenure signifies a lower interest rate. If the loan is foreclosed, the borrower must ensure that they aren’t charged any costs by the lender.
- Figuring out the Total Cost
The EMI calculator may be used to determine the total cost of the loan. Once the desired loan period, interest rates, and sum of the loan have been entered, the calculator can be used. The borrower can select the most suitable loan that satisfies their needs in this manner.
- Looking into the Budget
Before applying for a loan, the applicant should review their responsibilities and monthly budget. The borrower should reevaluate any existing loans that have not yet been paid off.
- Terms and Documentation
Before applying for a loan, the applicant should verify the necessary documentation. The borrower should review the necessary documentation. Borrowers should choose the lender with the fewest documentation requirements.
If the lender simply needs the essential documents from the customer, they should also check this. Before taking out a loan, it is important to consider the terms and conditions included in the loan documentation. The applicants need to verify if the lender is imposing any additional fees or charges that might drive up the total expense of the loan.
- Comparing the Lender
Even while lenders make highly alluring offers to customers on digital platforms, borrowers must investigate the legitimacy of the lenders using these online platforms for lending. A permanent official address and other documentation should be present on the lender’s portal.
Before requesting a loan from the lenders, the applicant should consider each of these factors. Before taking out a loan, one should be mindful since many people have experienced harassment.
- Verify Your Debt-to-Income Ratio
It’s crucial to assess your debt-to-income ratio before applying for a personal loan. It’s the simple ratio of your monthly gross revenue to your monthly repayments of debt.
A debt-to-income ratio of more than 40% could be bad for your credit score. Therefore, it’s advisable to keep yours below this threshold. Additionally, it’s a good idea to confirm that you won’t experience any difficulties repaying your loan on time.
You will need to set aside additional funds each month if you’re taking out a personal loan to pay the interest along with your other expenses. Check this need, therefore, to make sure you can continue paying your bills after receiving the loan.
- Choose the Online Application Method
Whenever possible, borrowers should choose the online application method. Applications made online are more quickly and affordably offered. Customers’ turnaround times are shortened. Additionally, borrowers can receive notifications on the EMI pay-outs and verify the status of their loans.
Several DON’TS are
- Don’t Submit Too Many Loan Applications
The borrower’s credit score will drop, and the lender’s overall impression of them will be negatively impacted if they apply for multiple loans at once. The borrower does not want to see a decline in their credit score because it might harm their credit report for a longer period of time. Additionally, the lending institution will not prefer granting the borrower’s loan if their credit score is poor. Before qualifying for a loan, the applicant must look at their spending habits.
- Don’t Skip EMIs
Applicants for personal loans shouldn’t forget about their EMI payments. If the borrower fails to make personal loan EMI payments, the lender may impose penalties. Compared to other loans, personal loans have greater penalty rates for late payments because of their high interest rates. In addition, late payments harm credit ratings and future years of loan eligibility for personal loans.
- Don’t Forget to Pay Attention to Your Credit Score
It can be expensive to apply for a personal loan without first verifying your credit score. If you’re looking for a personal loan from a lender with a favorable interest rate, it is very important to take your credit score into account. If you choose to ignore your credit score, your interest rate may increase.
- Don’t Limit Yourself to the Cheapest Interest Rate
Let’s say you choose a lender only based on the interest rate. If so, you might be missing out on other elements that could make your loan experience better. You may have to spend a lot in interest if you fail to pick your lender wisely.
- Unexpected costs
- Penalties for prepayment
- Additional costs
Decide on a lender who offers you a complete package at a reasonable price. After paying great attention to every other consideration, proceed with this.
- Don’t Avoid to Check Your Requirements Before Applying
Applying for a personal loan without first figuring out if you’ll have sufficient money or inadequate funding is a risk. As a result, you run the possibility of not meeting your objectives or going overboard due to having too much money. It’s advisable to borrow only the amount required after carefully evaluating those needs.
- Don’t Take Out Loans from Unauthorized Lenders
Many lenders make what appear to be attractive lending offers. Understand that some of them are not trustworthy. To get the best personal loans, just take reputable financial institutions into account. Loan applications have been used by numerous organizations to introduce their loan offerings. By getting a loan from reputable companies, you may stay away from unforeseen expenses and associated costs.
Bottom Line
Some dreams do require financial support. Whether you have a brilliant startup concept in your head or an amazing trip itinerary ready for you and your companions, achieving these goals frequently calls for more money than you already have.
This is where personal loans enter the picture, prepared to support you monetarily. Personal loans are a wonderful financial tool that should be used wisely and mindfully, not only for immediate necessities but also for long-term advantages like raising credit scores.
Unsecured loans are simple to get and allow the borrower to utilize the money to their fullest potential because they don’t require any kind of security. Before asking for these loans, keep in mind a few of the aforementioned dos and don’ts. These loans may prove to be beneficial and are among the best types of debt an individual can take on.