Today, it is quite common that you find at least one e-mail related to instant or pre-approved loan in your mailbox. Right? Well, the creative teams at banks are actually making you feel that the offer has specially been customized for you, but do not fall prey to attractive advertisements. The lifestyle that most of the people wish to live today can chomp off a major chunk of money from our pockets and this is why the unexpected financial requirements come.
Nowadays, getting a personal loan has become much easier than it was a couple of years ago and the credit goes to myriads of online portals and lenders. Though the best personal loans today are easily accessible, they can be tricky if you do not know them well. Hence, this webcast comes up with the factors that you must consider before you apply for a personal loan:
- Kind of Interest Rate
There are many types of interest rates in the market today, but the most important thing to consider when applying for a personal loan is to check whether the interest rate is variable or fixed. A fixed rate of interest is one that remains constant throughout the tenure of the loan and a variable rate of interest is one that increases or decreases as per the ongoing index value.
- Additional Fee and Charges
Hold your horses before you apply for personal loans as the interest is not the only fees that are charged in a personal loan. However, there are additional charges also that you are supposed to pay when you avail a personal loan. Following are the additional fee and charges that you must know:
- Processing Fee: Paid when the personal loan is being processed
- Late Fee: Paid when your monthly payment is delayed
- Prepayment Fee: Needs to be paid when you choose to pay the loan amount before the decided tenure.
- Credit Score
Your credit score is the deciding factor whether or not you are eligible for a personal loan. Moreover, your credit score also determines the rate of interest that you shall be charged on your personal loan. Therefore, you must check your credit score before you apply for personal loans online. Also, recheck your reports for errors and immediately get them rectified so as to get a clear picture of your credit score.
- Overall Cost of Personal Loan
Before you apply for personal loan, you must consider the overall cost that the personal loan incurs on your budget including the interest and additional fees. If your requirement that you have is not worth the overall cost of your personal loan, then it is not at all feasible to take a personal loan.
You must consider all the above-mentioned factors before you apply for a personal loan. Keeping all the above factors in mind, you will never make a mistake while borrowing money and you will avail the best personal loans. Moreover, if you choose to avail a personal loan, ensure you maintain your account properly in order to boost your credit score.