Do’s and Don’ts while availing an instant personal loan

One of the scariest things about a financial emergency is that they come unannounced. This is why a lot of people today prefer personal loans. Given their unique features like instant finances when required and the ability to use them for any purpose makes them quite popular. We have drawn out some do’s and don’t’s you should consider while availing a personal loan online:sumathy

Things to consider when you apply for an instant personal loan

1. Do: Understand why do you need an instant personal loan
   Unlike other types of loan which are availed for a specific purpose, a personal loan can be availed for any reason. You can avail an instant personal loan to consolidate your debt or use it to fund various needs like higher education, travel, marriage, buy a new house or car, etc. While availing a personal loan to get out of a debt trap might seem counter intuitive, but it is not. Interest rates on personal loans are quite less as that compared to a credit card.
2. Do: Shop for a personal loan online with lowest interest rates
   It is vital to look out for a personal loan with the lowest interest rates possible. This is because a small change in personal loan interest rates could save you thousands of rupees during the tenure of your loan. However, this does not mean that you should ignore other factors. Look out for additional charges like early repayment fees, loan origination and arrangement fees, etc.

For instance, personal loan companies like Indiabulls Dhani provide competitive interest rates along with plenty of features such as paperless, online documentation and instant loan disbursal. The Dhani mobile app also has an e-wallet and a loyalty points system that make the entire borrowing and repayment journey convenient and rewarding for the user.

3. Do: Consider how you are planning to pay off the personal loan
   Availing a loan without judicious mapping out a viable repayment plan is simply asking for troubles. To avoid a situation of inability to repay the loan, assess the amount you can afford to spend on monthly payments. Look out for other factors like a promised bonus or a promotion that can pay-off your debt.
4. Do: Keep track of your credit score
   Keeping track of your credit score and ensuring that it is decent enough is very beneficial. Doing so opens the door to more reputable lenders. The higher your credit score, the higher are your chances of availing a loan with lower interest rates and higher disbursal amount. A credit score of 750 and plus is considered to be good.
5. Do: Read the fine print
   This is one of the most important steps to be followed. Ensure that you have carefully read all the crucial details like maximum loan tenure, required repayment schedule, income cut-off criteria, if any, or how long would it take for your loan to be approved. Look out for extras and added fees like loan repayment insurance policies, which is not required, but just a way to extort more money from you.

Things to avoid during a personal loan application

1. Don’t: Skip loan repayments
   Defaulting on a personal loan, or any loan, for that matter, will tank your credit score to a great extent. A poor credit score might mean extra difficulty to avail a personal loan in the future. Also, some lenders like Indiabulls Dhani offers its customers additional benefits in terms of extra cash earned, on timely repayment of loans.
2. Don’t: Borrow from unofficial lenders
   Sure, unofficial and shady lenders might offer loans at attractive rates and terms, so much that it seems too good to be true. But, by engaging in financial agreements with them means exposed risks. Without any official backing, these shady companies can suddenly jack up their rates, sell your debt to another creditor, or call in your debt. Ensure you avail a personal loan from a legitimate lender like Indiabulls Dhani.

In association with IndiaBulls