During the covid-19 pandemic, we have experienced changes that no one ever expected to happen in their normal course of life. The entire thought process behind savings & expenses also took a toll as the change in lifestyle allowed us to revisit and analyze the importance of having a life instead of just slogging it out for money.
The pandemic taught us that we need to prepare ourselves for such situations and keep contingency plans in place to meet financial needs in the time of such an emergency. In case, we use our savings for any such emergency, it affects the financial stability of a household and adds a sense of insecurity at the same time. To avoid such compelling situations, we can make good use of various loans options available and keep our savings intact. Nowadays, there are various loan options made available by banks and NBFCs with requirements.
Out of all the loan options available, a personal loan is one such facility where the borrower is allowed to use funds for diverse needs, whether for a medical emergency, a vacation, educational expenses, buying furniture, or anything else. It can be used freely for all sorts of expenses even to clear your existing credit card bill payments. However, one needs to get hold of a few important factors regarding the processing and charges that are required to avail of a personal loan. Here we have discussed a few key points that one needs to keep in mind while availing of a personal loan.
Maintain a good credit score
A credit score is one of the most sought after information about an individual for loan approval. Most lenders consider it as a deciding factor in terms of an individual’s capacity to repay debt and take an idea about the creditworthiness of the borrower. An individual can maintain a good score by paying their EMIs on time, not exhausting their entire credit limit for the cycle, and using the credit limit only when it’s urgent and important. A good credit score always helps while a borrower negotiates with the lender for a low personal loan interest rate.
Avoid inquiries that are untimely and unnecessary
In case of an emergency or an immediate need, most borrowers tend to enquire and apply with multiple lenders at the same time in order to get the easiest and fastest deal possible. However, this hampers an individual’s credit score and might bring it down a notch, to avoid such a condition a borrower must first contact their own bank and ask for the best possible deal, in case it does not work then only try inquiring about it with others. Mostly, banks cooperate with their existing customers and provide the best offer.
Keep a regular flow of income
Traditionally, all loan-related products are designed in a way that they require a systematic repayment plan in order to pay for the loan. The loan approvals generally revolve around the past repayment history and the present repayment capability of the borrower, which is determined by the amount a person earns in a month from their job or business. By showing proof of income on a regular basis, a borrower can easily negotiate the personal loan preferred customers, majorly those who have had a long relationship with the bank. The reason behind being the trust and security quotient, the banks are aware of the borrower’s behavior regarding the payments and services availed, which ultimately works as an unsolicited credit report.
Once a borrower ensures that the points mentioned above are taken care of, they can have the best rates possible amongst other borrowers. In case you are willing to avail a loan, whether it’s a home loan or a personal loan, you can visit Apnapaisa for the best deals and offers.