Things not to do when applying for a Personal Loan

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Banks have curated a range of products and services that help you manage your finances. A Loan is the finest banking product you can rely on whenever you need funds. By applying for a Loan, you can borrow a lump sum amount at a competitive interest rate within the chosen tenure. You can repay as Equated Monthly Instalments as per your affordability without feeling burdened.

There are different types of Loans available. A Personal Loan is a common type of Loan everyone applies for. Such Loans fulfil your personal financial requirements. You can apply for Personal Loan with any leading bank or financial institution, offline or online. Ensure you do not do the following when applying for a Personal Loan:

Learn about your eligibility

Personal Loans are a preferred financing option among all borrowers as they have simple eligibility criteria. However, applying for a Loan without knowing your eligibility can be a mistake. If you do not meet the bank’s eligibility criteria, they will offer you a lower Loan amount or reject your request. Hence, check your eligibility before applying for the Loan.

The Personal Loan eligibility calculator is a fantastic online tool that determines your eligibility. All you need to do is enter key information and calculate. The calculator is readily available on the bank’s online platforms.

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Apply for the right Loan amount

You may be eligible for a higher Loan amount based on your financial profile. However, you should refrain from borrowing more than you need. A higher Loan amount increases your interest liability. This increases the payable EMI. You may not be able to repay the increased EMI amount. Given this, you will feel burdened with your Loan repayment.

Avoid mindlessly opting for lowest interest rates

As mentioned, you can apply for a Personal Loan with any leading bank. You should consider a few important factors before applying with any bank. Typically, apply with a bank offering the lowest Personal Loan interest rates. It makes your repayment affordable. However, do not just consider the lowest interest rate when applying with the bank. Check if the bank offers digital banking services, flexible repayment terms, and fair Loan fees.

Use the Loan amount appropriately

While you can apply for a Personal Loan to fulfil any financial requirement, do not use it for discretionary spending. Do not use the Loan amount for shopping and purchasing unnecessary luxury items will cost you terribly in the future.

Do not deafult Loan repayments

Do not miss out on Loan repayments it causes financial stress and negatively impacts your credit score. Use the Banking App to automate Loans and other periodic payments. This ensures you never miss a due date.

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