Instant personal loans are very popular nowadays. Most Indian banks, as well as the leading NBFCs, offer instant personal loans on easy and convenient terms. As a result, getting instant financing has become much simpler than before. However, before you opt for such a loan, there are some important points that you should note. What are they and why are they important? Read on to get the answers.
- Check the interest rates:
A personal loan is an unsecured loan. Since there is no collateral, the lender takes on a risk by offering the loan to you. This is why they charge a higher rate of interest. Also, if you have a slightly lower credit score, the interest rate goes up even further. You need to calculate the rate of interest being offered to you, compare it with the other loan providers’ interest rates and then see whether or not you have a good deal. Don’t be in a rush to take the loan. Compare and then choose the most economical option. The comparison process is easy and you can do it online in just a couple of minutes, so do not skip it at any cost.
- Consider the repayment scheme:
Be very clear about the repayment right when you take the loan. You may want to choose a higher EMI volume in an attempt to repay the loan at a quicker pace. Avoid this, as it may become a risky thing to do. If your EMI volume is too high, it will become a financial struggle each month and may even lead to you defaulting on the loan. Avoid this at all costs as missing a personal loan EMI can be very dangerous and harmful to your credit history. Rather, take your time and pay the loan off in smaller, but regular instalments. Speak to your lender and work out a flexible EMI scheme.
- Are you borrowing too much?
You may be allowed to borrow a lot of money from an instant personal loan. However, you need to evaluate your requirements and borrow only how much you need. The more you borrow, the more you have to repay. Additionally, you also have to pay the extra interest on that amount. So be very cautious about this and do not get swayed by the offers the lender provides you with. Stick to your own financial plan and proceed accordingly.
- The bottom line
Every coin has two sides to it and there are pros and cons associated with everything. This is also the case with instant personal loans. While on one hand they are very convenient and genuinely help you to come out of financially tricky situations, on the other hand, they are expensive and can get complicated. This is why you should do a bit of homework before you take the loan. Also, remember to take only what you need and repay it on time.
