Five Questions to Ask Before Getting a Personal Loan

A personal financial loan is an unsecured loan that you can use to meet your financial needs. You do not need to provide any collateral or security to the lender to avail this loan. You can also avail instant pre-approval personal loan. It is the reason why people prefer to get a personal loan as compared to other options. 

You should always try to analyse whether a personal loan would serve the purpose of your borrowing the same. 

If you have decided to take a personal loan, it is vital to consider factors like personal loan eligibility criteria, personal loan EMI, personal loan interest rate and many more. 

Read on to know the questions that you should ask yourself before getting a personal loan.

Vital questions that you should ask before getting a personal loan

• How much do I need to borrow?

Once you have decided to get a personal loan, the first question that you should ask yourself is the exact amount of personal loan that you need to borrow. A personal loan is nothing but debt. Thus, it is important that you do not borrow more than what you need.

• What should be my personal loan EMI and its affordability?

A personal loan is repayable in equated monthly installments (EMI) over a period. It is important to determine the personal loan EMI that you can afford to pay without disturbing your monthly financial budget. You should choose an EMI that is affordable for you in the long run. Personal loan EMI depends on a lot of factors like the loan amount, loan tenor and loan interest rate. You can use a personal loan calculator to know an exact EMI that you will pay on the desired amount. 

• What are the personal loan eligibility criteria? 

The next thing to find out after determining the loan amount is your personal loan eligibility. Personal loan eligibility is the amount of loan you are eligible to borrow. It is important to identify your personal loan eligibility to simplify the loan process and borrow the desired loan amount. You can use personal loan eligibility calculators available online on different portals to calculate your loan eligibility. One of the most important personal loan eligibility criteria is a good credit score. The credit score determines your eligibility for a loan, the loan amount and the interest rate on it. You can enhance your loan eligibility by improving your credit score by paying your loan EMIs and credit card outstanding on time.

• What should be my personal loan tenor?

Another important question to ask yourself before getting a personal loan is the time within which you would repay your loan. Loan tenor is a critical consideration. If you go for a small loan tenor, your EMIs would be higher. But a loan with a longer repayment period will not create a burden on your monthly budget as the EMI would be less. But, you may need to pay compounding interest, which may increase the loan cost. Thus, you should also consider future financial obligations before deciding your loan tenor.

• What is the personal loan interest rate payable?

The interest payable on a loan is the cost of procuring a loan. One of the most significant aspects of a personal loan is to determine the interest rate payable on it. You should always try to get a personal loan at the lowest possible interest rate. The interest rate on your personal loan depends on many factors like loan amount, credit score, monthly income and others. 

Taking a personal loan is a big decision. It is vital that you read the terms and conditions of the loan agreement before entering into it. You should always make an informed decision so that you do not have to regret in future.

Bajaj Finserv brings to you pre-approved offers on various financial products like personal loans, home loans, and many more. 

It is easy to simplify the loan procedures that makes it less time-consuming. 

You can check your pre-approved loan offer by sharing some basic details like your name and mobile number. 

Also read: Top 10 Personal Loan Apps in India