In today’s fast-paced lifestyle, we often spend more than our monthly income, forming a debt trap. Being indebted to friends, family, and even the Credit Card company makes it difficult to repay the amount, considering the high expenses. A financial emergency arises without warning, and you cannot neglect it.
At such times, getting the lowest Personal Loan interest rates is an excellent way to pay off Credit Card debts, renovate the house, or cater to a medical emergency. It is a multi-purpose borrowing, enabling you to succeed in accomplishing your endeavours. However, it is imperative to follow specific tasks:
Compare and research
Avoid falling for the first offer you receive through email, SMS, or the internet. Look for the best deals online by comparing and researching interest rates, tenure, eligibility, and other aspects. Though it is convenient to refer to the existing bank, there is no harm in comparing the schemes offered by others in the market.
Check your credit score
While applying for a Personal Loan, remember to check your credit score as it determines your creditworthiness. A high score helps you get the amount at reasonable interest rates, whereas a low score leads to rejection. The best score is 750 and above. Checking your CIBIL score before applying is imperative to avoid hassles in the future.
Calculate the interest rate
When availing of a Loan, check if you are getting it at a floating or fixed rate. A fixed interest rate ensures that the EMI stays the same throughout the tenure. In contrast, a floating interest rate varies depending on the market scenario. Therefore, always calculate the overall interest you would be paying towards the Loan and choose the interest rate type that suits your financial plan.
Check the eligibility
You can check eligibility by using the eligibility calculator on the Banking app. It considers the monthly income, company name, location, and other details. You get an idea of the amount you are eligible to receive from the bank and can plan your expenses accordingly.
Approach limited banks
Looking for the best Personal Loan interest rates is wise. But making multiple applications and enquiries online dents your credit score. It shows that you are credit hungry which may lead to rejection. To be safe, make small and wise attempts by comparing the schemes. Likewise, you know the market rates and evaluate the best one.
Check foreclosure charges
In case of early repayment or part payment of the Loan, banks charge a fee for foreclosure. The banks levy them as they miss out on earning the Personal Loan interest rates expected from the deal. Therefore, you must be selective and opt for a bank charging zero or low foreclosure charges.
Conclusion
A Loan can help you sail from financial emergencies that can otherwise spell disaster. By remaining financially prepared, you avoid falling into the debt trap.
