In the past few years, we’ve witnessed an extraordinary upswing in the popularity of instant personal loan in India. These applications provide a seamless and effective means for individuals to obtain funds, sidestepping the cumbersome documentation and prolonged approval processes often associated with conventional lending establishments.
With these ground breaking apps, individuals can swiftly and seamlessly acquire funds, enabling them to address their financial requirements promptly.
What is a personal loan?
The personal loan represents an unsecured loan variant accessible to individuals through banks, credit unions, or digital lenders, serving their individual fiscal necessities.
In contrast to loans earmarked for specific intentions like mortgages or auto loans, these funds are versatile and applicable for diverse purposes. This encompasses medical bills, consolidating debts, enhancing residences, educational outlays, wedding costs, or any other individual monetary demand.
Why You Need to Check Your Credit Score Before Applying
When it comes to finances, no one prefers surprises. You can come across several instances when a potential homebuyer might have selected the property, ensured advanced payments, and applied for a home loan or a personal loan from a leading banking institution. However, they end up finding that their loan application was ultimately rejected because of a poor credit score.
Whenever you apply for a personal loan, it is important to check your credit scores for the following reasons:
1. Choosing the Desired Course of Action: When you are aware of the credit scores beforehand, you will understand whether or not you can get the loan approval. With a low credit score, you can consider looking for other options to get the desired funding.
2. Ease of Approval: There are several instances in which your credit determines your payment behavior with respect to payment history. When you know your credit score beforehand, you will understand the loan approval process easily.
3. Low Interest Rates: With a good credit score, you can easily get loans with low interest rates.
How to Determine the Right Loan Amount and Term
Some essential tips are:
1. Determine Your Financial Condition: While determining the desired loan amount, look into your existing financial condition. Some factors to consider here are your income, monthly expenses, and financial goals. Understand how much you are able to pay comfortably every month without affecting your finances.
2. Consultation with Lenders: Reach out to different lenders or financial institutions offering access to personal loans. Compare interest rates and loan terms. Explore your choices thoroughly.
3. Determine Your Total Cost: Calculate the overall cost, including interest rates, for both short-term and long-term options. This will help you understand the financial impact of your selection.
How to Choose the Best Lender for Your First Loan
Irrespective of the reason you require financing, you should choose a lender that aligns with your financial goals. Here are some points to consider:
1. Compare Interest Rates: Borrowers should always evaluate the interest rate offered by different lenders. Even a slight difference in the interest rate can lead to a major difference in the overall loan cost. Leading lenders like Stashfin offer the ease of reduced interest rates and a flexible loan term, even for instant personal loans.
2. Look for Hidden Charges: While going through the paperwork, look for hidden charges if any. Some of these could include processing fees, foreclosure fees, late payment fees, and other document-related fees. These fees could eventually add up and increase your overall loan cost.
3. Know the Details on Disbursal Times: At the time of need for emergency funds, the timeliness of loan disbursal is crucial. For example, Stashfin offers instant loan disbursement even for personal loans. Others may take a few days to complete the process. Stashfin loans are disbursed within a short time and are effective for those who are in need of urgent funds.
4. Understand Mobile and Digital Capabilities: In the modern digital world, lenders featuring a mobile and online presence are able to simplify your overall loan journey. When you choose lenders like Stashfin, having a dedicated mobile app, you are able to apply, track, and even manage your loan with your smartphone. A lender that is digital-savvy will help you save ample time and ensure effective control over your loan.
Comprehending Loan Repayment and Their Relevant Costs
To maintain a smooth flow in your finances, knowing about the repayment of loans and their relevant costs is crucial. Usually, any loan payment can be broken down into two main components – interest as well as the principal amount. These transactions can be made in a lump sum or even in multiple payments over a reasonable period of time.
The actual repayment amount depends on the loan amount taken, loan tenure, and, more importantly, the interest rate. Longer repayment periods decrease monthly installments, increasing overall costs.
In addition to the interest and the principal amount, you should know about additional costs, including late payment penalties, processing fees, and prepayment fees. There can be some loans with hidden charges that increase the overall loan cost.
Conclusion
As you apply for your first personal loan, you should ensure careful planning and proper decision-making. It is important to understand your financial needs and compare lenders based on your specific requirements. When you make an informed choice, you will be able to secure a flexible personal loan to align with your financial goals.
Frequently Asked Question
What is the minimum credit score required for a personal loan?
The minimum credit score requirement for a personal loan application will depend on the lender. Typically, a credit score of around 600-650 is needed for easy loan approvals.
How can I check my credit score for free?
Stashfin allows you to know your credit score for free. The platform offers the ease of free credit score checks to help you determine your overall financial health.
How long does it take to get approved for a personal loan?
The loan approval time will vary depending on the lender. For example, Stashfin offers instant loan approvals when you apply through its mobile application.
Can I apply for a personal loan with no credit history?
Yes, you can apply for a personal loan with no credit history. Leading lenders like Stashfin make it easier to apply for a loan even with a low credit score, along with easy loan disbursals.
