Personal loans are a handy way to get access to immediate funds to solve urgent needs. You might need quick access to a significant amount of money to fund your medical emergencies, sudden travel plans, home repairs, etc. Personal Loans are the go-to option to avail immediate funds.
If you are wondering how to get personal loan that is most suitable, the following steps will guide you through the process:
Maintain a High Credit Score
To ensure that you get the best offers while availing a personal loan, you should keep your credit score high. A personal loan is an unsecured loan, which means that banks will check your credit rating before approving your loan. Furthermore, a bank will also reward applicants with a high credit score by offering them lower rate of interest on personal loan. However, to improve your credit score, you need to settle pending loans, pay your dues on time and avoid any defaults.
Analyse Your Budget
Before selecting a personal loan, you should evaluate your fund requirements and savings. If you are low on savings, you can fund the deficit by availing a personal loan for that amount. You should also check your budget to get an idea of whether you will be able to repay the loan on time. Personal Loans with a longer tenure allow you to repay your loan in smaller EMIs.
If you need a personal loan for immediate requirements, a longer processing time may not be favourable. While some banks require a lot of documentation and a longer period for approving the loan, there are others, that can offer you pre-approved loans. Pre-approved loans have a lower processing time and faster disbursement.
Consider Annual Percentage Rate (APR)
When you evaluate your options for availing personal loans, considering the interest rates is a crucial step. However, some people do not consider the Annual Percentage Rate (APR) and make their loan decision on the base rate of interest on personal loan. Annual Percentage Rate is a percentage that measures the total amount of interest that the borrower will be paying annually throughout the loan tenure. It is a better measure to consider as it calculates the rate by evaluating the net amount of funds received and the net amount of repayments made through EMIs. Other than the interest rate, additional expenses like processing fees, application fees and other miscellaneous charges would also be considered while calculating your APR.