One of the most popular festivals in India i.e. Diwali is just around the corner. Naturally, every small and large business, shopping complex, and ecommerce store is busy is rolling out attractive deals and discounts to woo the customers and maximize profits. However, this is a good time for the people to get a loan as well as the banks offer attractive interest rates and other advantages that aren’t usually available during the rest of year.
If you are looking for attractive loans this Diwali, then be sure to take note of these points:
Just because banks are offering great deals on loans doesn’t mean you can avail them if you want to. There is always an eligibility criterion for a loan. For starters, your CIBIL report should be up to mark with a high credit score and good credit history. Your income should also be sufficiently high. So, if you have made a lot of late credit card payments or EMIs in the past, defaulted on a loan, or have a poor score, then you may not qualify for the loans during the festive season.
If you want to be prepared for loan offers in advance, then make sure you have all the documents that you might need. These include:
Identity proof: driving license, passport, Aadhaar, PAN, etc.
Address proof: recently utility bill (electricity bill, phone bill, etc.), passport, etc.
Bank statement or passbook that has the details of your income for the past 6 months
Income tax return for the past 3 years
Financial records including balance statement (in case of a business loan), credit cards statements, etc.
If you fail to furnish any of these documents, then your loan application can be rejected even if you have a good credit rating. So, it’ recommended that you arrange these documents in advance so that when the loan offers are actually available, you are ready to apply without delay.
Everyone loves options- in clothing, food, jobs… actually everything, including loans. So, when it’s festive season and all the top banks have launched attractive deals for home loans and personal loans for their customers, you may want to apply at each one of them in hope that you might qualify for multiple loans and then you can choose the best option of them all. Unfortunately, this isn’t as good of an idea as you may think.
When you apply for a loan at a bank, then they raise an inquiry for your CIBIL report as they want to ensure that you have a high credit score, and the financial details provided by you actually match the records. However, this “inquiry” is not good for your credit rating itself. So, when you apply for a loan at multiple banks at the same time, it leads to multiple inquiries raised by each bank. This can greatly hurt your credit score. So, it’s important that you select your best loan options and submit an application to no more than two of them.
Minding the Budget
A lot of times, people give in to the loan offers available during the festive season even when they don’t really need a loan. It’s not hard to see why this isn’t a good idea.
You must understand that no matter how good a loan offer is, you have to repay it along with interest even if it’s lower than standard. Thus, you must take your income and expenses like credit cards bills, EMIs of existing loans etc. into consideration before you actually apply for a loan. Even if you really need a loan, make sure that you pick an amount that you are comfortable with. In other words, you should be able to pay the EMIs without having to compromise with the quality of your life or to go through stressful cash crunches.
Terms and Conditions
To attract a large number of people, a lender may deliberately hide certain aspects of a loan that are undesirable and instead highlight only the advantages. So, make sure you are not impulsive and read the fine print before you actually sign on the dotted line.
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