Personal loan applications are straightforward but that does not prevent borrowers from making mistakes which could lead to rejection and a poor experience. This article discusses 5 such mistakes and tips on how to avoid them.
Personal loans from Fullerton India are a good source to finance expenses and can come in handy, especially due to the minimal documentation process and faster sanction periods. Since these loans are significantly easier to avail than any other kind of loan, it comes in handy in times of emergency.
Many financial institutions offer personal loans, however, not all of them are at competitive interest rates and flexible tenures. Fullerton India personal loans are a solution to that and can be borrowed with ease. With that being said, despite its simplistic nature, there are some things you should keep in mind before applying.
5 Costly Mistakes to Avoid Before Applying For a Personal Loan:
Borrowing Beyond Means
Borrowing a loan beyond your means, essentially meaning your repayment capacity, is a major mistake and can threaten your financial health in the future. A basic rule of thumb to avoid such a circumstance is to ensure that the EMI of your personal loan does not exceed 10% of your monthly net income. This ensures that you are borrowing within your means and you will be able to return the corpus of the loan well within the stipulated tenure of the loan.
Too Many Loan Applications
In times of desperate need for funds and emergencies, people tend to panic and apply for multiple loans in one go-to resort to whichever lender reverts first. Although this seems like a good idea in principle, it is a misstep that can adversely affect your credit score. When reviewing personal loan applications, lenders make a hard inquiry in the course of processing. This shows up on your credit report, and due to too many hard inquiries, your credit score may take the hit and see a decrease. So, apply only to Fullerton India, a representative will get in touch with you as soon as they receive your application.
Neglecting the Fine Print
Not reading the fine print when considering taking a personal loan is a very common mistake. This leads to borrowers overlooking expenses such as prepayment penalties, processing charges, etc. You must also ensure that you thoroughly understand the interest rate being charged, the loan amount you are taking, the loan tenure and your EMI amount.
Lack of Research
No Tenure and EMI Balance
Many borrowers do not establish a tenure and EMI payment balance. This means that, although you can lower your monthly EMI by availing of a loan with a longer tenure, you must make sure that you are able to pay it back for that long. A similar case can be seen with people who overestimate their repayment capacity and take a shorter tenure loan and high EMIs but find it difficult to abide by it. To estimate your monthly EMI in advance, use Fullerton India’s personal loan EMI calculator. By doing this, you will get a fair idea of your monthly EMI amount and can choose a tenure accordingly. You can decide a tenure that best balances your budget with your ideal timeline to become debt-free.
Although Fullerton India’s personal loans are a quick fix for financial woes and the need for funding, borrowers must understand that there are some pitfalls along the way that they need to avoid at all costs. Follow the above-mentioned points for better financial planning. Fullerton India’s personal loans not only offer competitive interest rates, flexible loan amounts, and tenure, but also full transparency, which as seen above, is an integral part of a seamless loan-taking process.
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