When it comes to the different loans available in the market, the personal loan has been a popular option for plenty. Not only does it offer a financial variability, but it also requires a short loan processing tenure, making it the most accessible loan. However, at the same time, you will need to expect certain disadvantages to this loan. Some of the drawbacks of this loan include high-interest rates and short tenures. Apart from these features, there are plenty more you will need to consider. Given below are a few important factors you will need to consider when it comes to applying for a personal loan.
Shopping for better rates is essential
Shopping around for different personal loan rates may seem like a tedious job. However, it is crucial that you take such a step as it not only offers you a wider opportunity to get the best of rates but also the leverage to negotiate for better rates. Additionally, if you apply for these loans only to check for the rates, it can affect your CIBIL score, which in turn can affect your credit score. To get an overall view of your loan and how it can affect you, you can always use the personal loan EMI calculator for better clarity.
Consider your needs over eligibility
You must focus on your financial needs over your eligibility. If you need a fixed amount to satisfy your financial requirements, apply for a loan of that same fixed amount. Plenty of times, banks, and financial institutes can review your eligibility and offer you loan rates that are higher that what you need. While this extra financial aid will provide you with the convenience of funds, you will still need to repay the borrowed funds, the interest calculated on the principal amount as well as the additional charges. A personal loan EMI calculator will provide you with the calculated results of the different loan amount, as is the best tool that you can use to check whether you can afford the loan or not. After all, a personal loan may be the most convenient loan, but it is still the most expensive form of debt.
Ensure that you can afford the EMIs
While you may be able to afford the overall loan with the added interest and the additional charges, at the same time, you need to manage the EMI’s to repay this borrowed amount. You must be honest with yourself, after all, only you would be aware of your repayment capability better than anybody else. Use the personal loan EMI calculator, to calculate the different rates required to afford the EMI of your loan. If you can adjust the loan tenure or the interest rate to suit your needs, go for it.