People take loans for various reasons viz. marriages, medical expenses, foreign trips, higher education, etc. However, the problem is that traditional lenders don’t sanction personal loans as easily as you would want. They take the credit history of an applicant quite seriously and rarely take any chances. What it means is that if your credit score isn’t high enough, then you may not get a loan at all. This is why online loans have become quite popular.
Today, the fintech industry is thriving and offering flexible financial solutions to people across India. However, if you are going to apply for a personal loan, then be sure to check the following first:
Whether it’s a traditional lender or an online lender, the personal loan interest rate should be one of the most important things that you check before you submit your application. This is because the higher is the rate, the bigger are the EMIs and your financial burden. So, be sure to compare the rate offered by an online lender with others.
Just like traditional lenders, online lenders may also impose different kinds of charges on your loan amount. So, you should check out the information on that so that you know exactly how much money you will need to pay to the lender in the end.
One of the biggest USPs of P2P platforms it that they offer flexible solutions. So, many of them won’t impose a fine if you decide to prepay a personal loan. However, some may charge it if you decide to clear the debt sooner. So, if you think that you might be able to arrange enough money to repay the loan sooner to lower the personal loan interest rate amount paid, then you should check the terms and conditions of the website to confirm is prepayment fine is levied.
Quick disbursements of funds are something that the online loan providers take pride in. In fact, the majority of them approve loans within an hour and release the funds within 24-48 hours after the verification process for the documents is finished. However, you shouldn’t assume it to be true when you are applying for a loan yourself, and check exactly how long is the disbursement period of a particular lender.
As you may already know, your credit score i.e. CIBIL score can have a huge impact on your loan application. If your score is high, then you can expect easier approval and affordable interest rates. On the other hand, if your score is low, then getting a loan can be quite challenging and not to mention, the interest rates won’t be good either.
One of the benefits of online loans is that they can be obtained even if your CIBIL score isn’t up to the mark. This is because many online lenders use their own methods for the calculation of creditworthiness. So, this is something to consider if your score is poor. However, if your score is good, then you won’t face any major problems irrespective of whether the lender checks it or not.
If you are taking a personal loan for a specific purpose such as buying a car or motorcycle, then the lender may add other products like accidental insurance cover, engine insurance, etc. You may not need these, and even if you do need them, they might be more expensive than other products in the market. Thus, it’s advised that you remove them from your final cost if the lender has added them automatically.
Need vs Eligibility
Some lenders may try to lure you by saying that you are eligible for a loan amount much higher than what you are actually seeking. However, taking a bigger loan is never a good idea even if it’s easily available. This is because a loan, in the end, is debt which comes with the cost of interest. It’s an unnecessary financial burden that must be removed as quickly as possible, and the only way to succeed in that is to apply for a small loan.
So, that’s it- some of the things that you need to check when you apply for a loan online. Pick wisely, and good luck!
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