Personal loans, also known as signature loans, are a great way to finance your unexpected expenses. They help you consolidate your debt, and fund expenses like vacation, wedding, medical emergencies, besides others. Many individuals have pre-conceived notions about loans, some of which may not be true. It is important to have adequate information about such loans before borrowing one.
Following are the answers to five common questions you may have regarding personal loans.
1. How much money to borrow?
Do not borrow more than what you are able to repay. Besides, consider how much amount is required to meet your purpose, and borrow accordingly. Many individuals make the grave mistake of borrowing more than required. This leads to additional debt obligation if your cash inflow prevents you from making your regular EMI payments.
2. Is it feasible to apply online?
Applying online is the most feasible and convenient option. You may sit in the comfort of your home and avail of a personal loan online. Applying for a loan through the Internet is an excellent option for those who do not wish to visit their local branches. Besides, other loan-related information is made available on online portals namely eligibility criteria, interest rates, fees, and charges.
3. Is it possible to get faster loan approval?
Some lenders take as less as 72 hours, while some take a long time to approve and disburse the loan. If you need finance on an urgent basis, it is advisable to submit all the necessary documents in order. Once all the documents are in place, the approval process gets initiated quickly, thus leading to a faster disbursement of the loan.
4. Is it advisable to take more than one personal loan?
There are some individuals who are prone to borrowing finance for even the smallest of their requirements. Ideally, it is not recommended to avail of many loans at the same time. The interest rates on various loans are different, and if accumulated, lead to a large payable amount. Furthermore, if you default on your repayments, your CIBIL score could get affected. Hence, borrow a personal loan only if you have a real financial need.
5. Does the tenure of the loan matter?
Yes, the duration of the loan makes a huge difference while calculating the total amount to be repaid. A longer loan tenure indicates a higher final amount to be repaid, and vice versa. Hence, do not borrow a loan with a long tenure even if your lender is offering it. Instead, opt for a short-term loan if your financial position allows you to do so. It helps you save a lot of money in terms of the interest component.
A personal loan offers financial aid during times of difficulties. Hence, clear out any queries you may have in your mind before you apply for a personal loan online. Making a well-informed borrowing decision goes a long way in managing your finances skilfully.