Since Personal Loans are given to individuals without any security for their personal use, its demand is quite high in India. Not only are they easily available but you will have complete freedom over its usage as the lender won’t be monitoring it.
Though the advantages offered by personal loan are numerous, applying for it just because you can fulfill all its eligibility criteria is a strict no-no. If you think that repaying the money will affect your finances, you better think twice before borrowing. As a borrower, you should not only compare the loan before applying but also ask yourself few vital questions.
Applying For a Personal Loan? Few Vital Points to Consider
“How Important Is It?”
If you are applying for the mortgage to buy something expensive, think whether it’s just a luxury or a necessity. Using your credit cards for daily transactions is a cool idea and you can earn reward points as well. You can even repay the outstanding amount before the due date. But taking a mortgage to buy something expensive which is actually not necessary is never recommended. The best you can do is save your money and buy it later.
“Is The EMI Affordable?”
EMI or Equated Money Installment is the fixed amount you have to pay to your lender every month. The date is specified and the EMI comprises of both the principal amount and the interest. When you take a personal mortgage, you have to follow a strict repayment schedule. If you are not sure about your capability of paying the EMI, its better you rethink.
“Is It Fine To Borrow For A Vacation”
Though everyone needs a break at frequent intervals, applying for a mortgage just because you don’t have sufficient cash for all the expenses is not a cool idea. The main objective of a vacation is to relax. Since you have to repay the money after your return, you can’t have complete peace of mind even during your vacation. Even if you are taking the mortgage, think how you will repay it before starting the tour.
“When Should I Apply For The Loan”
If you have numerous credit card debts, taking a mortgage to repay those is a cool idea. Consider the repayment tenure and decide whether the shorter or longer tenure is more suitable for you. Whatever be the time you are applying for the loan, look for a consultant who can help you with Loan Application and comparison in India.
“What Will Be The Consequence If I Can’t Repay On Time?”
Considering the long-term effort of the mortgage before applying is a must. You need to think of the situation you might face if you can’t pay the EMI on time. If you accidentally lose your source of income in the future, you might have to face extra pressure. Every late payment will have a negative impact on your credit score.
This being said, make sure to consider all the points stated above & myths for opting loan application so that you can compare and choose the best loan!