Dos and Don’ts of Taking a Personal Loan.
In today’s decade and generation, when a personal loan is easily available with easy process and affordability. People choose to borrow a loan for a better lifestyle and also manage it properly.
However, we should know about the facts before borrowing a loan. One must have to take care of that; loans do not run out of pocket and also life. Also know the reasons to apply for a personal loan.
Do compare and check the interest rate before borrowing a loan
Always compare the rate of interest offered with loans by different financial institutes. Check whether you are applying to the right one or can have a better option.
Do analyze your FOIR
FOIR is known as fixed Obligations to Income Ratio. Let’s try to understand with an example.
One earns Rs.2,00,000 per month. Considering children’s fees, household expenses, personal expenses, EMI on the previous loan, end up spending Rs.1,95,000 per month turns into unpleasant FOIR. In this scenario, one may fail to repay the loan.
On the other hand, one earns Rs.50,000 per month. Considering children’s fees, household expenses, personal expenses, EMI on the previous loan, end up spending Rs.20,000 per month, which turns into pleasant FOIR. In this scenario, one will easily manage to repay the loan.
30-50% FOIR is substantial as a healthy range of FOIR. The lender will also check it before passing the loan application.
Do overall expense check on loan
The main benefit of a personal loan is that before check-in for a loan, one can calculate the overall expense through the tool known as a personal calculator. This tool, a personal calculator, is available on the Finserv MARKETS platform. It will take into calculation your loan amount, rate of interest on it, and also tenure to calculate EMIs you will have to pay.
Do check the term and conditions.
Every lender offers different policies with a loan, and also, every loanee had a different spending strategy. One may want to borrow a loan with smaller instalments throughout the loan. One may want to pay smaller first and larger amounts later. That’s why it is necessary to check the terms and conditions before getting in for the loan.
Do choose the favourable option: offline or online.
Everyone can apply for a loan online or offline mode as per their own convenience. Applying for loans online is faster and easier. You can check the status anytime from anywhere. At the same time, if you are not comfortable with using technologies, you should go offline.
Don’t resist your credit score
Your CIBIL score is a reflection of your payment history. It shows, will you able to repay the loan in time or not? Never ignore to take care of your CIBIL score. One can check the CIBIL score on a platform like Finserv MARKETS with the Financial Health Check Report (FHCR). FHCR gives a detailed report of your financial stability.
Don’t say no to a credit card
A credit card is the reflection of your credit history. It becomes easy for the lender to estimate your financial capacity.
Don’t apply without checking the required credit amount
First, It is necessary to calculate the required credit. Do not over-borrow. It will unnecessarily have monthly expansion.