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Every First Time Borrower Should Know This About Personal Loans

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When it comes to procuring a personal loan for the first time, the borrowers need to ensure a steady bank balance to assure the lender of their financial repayment capacity. The lenders keep a check on your savings bank account and also keep a tab on any cheque bounces or payment defaults. Thus, it is mandatory for the first time borrowers to maintain decent financial stats.

Lack of credit score and credit history for the first time borrowers doesn’t mean that they cannot avail the personal loan. Various lenders offer instant personal loan to new to credit applicants on account of their repayments of utility bills, rents (if living in rented accommodation) and other bills and payments. HDFC Personal loan is the most sought loan product by the first time borrowers because of its attractive offerings.

Here are some important pointers which every first-time borrower must keep in mind.

  1. Compare different lenders

The lending market is booming with lenders who are willing to offer loan to first-time borrowers. As there is no past repayment history involved, one ought to compare different lenders for their offerings in terms of rate of interest, EMI, loan amount, loan tenure, disbursal time etc for grabbing the best deal.

     2. Borrow as much required

A loan is like any credit which needs to be repaid. Though personal loans are easy to procure that doesn’t mean that you will go berserk for the loan amount. Being a first-time borrower, it is advisable to go slow and opt for a loan amount which one actually needs to meet the financial emergency. It must be noted that personal loan like any other loan is a liability which needs to be repaid on time. And these loans being unsecured in nature also incur a higher rate of interest which would mean that you will either end up with a higher EMI or longer loan tenure wherein you end up paying more as interest.

    3.Check for eligibility criteria

Different lenders have pre-defined eligibility criteria which they are very particular about.  These include age, income, employment, existing loans, credit score etc. Complying to them is mandatory and non-negotiable from lenders aspect. Thus, before applying for a loan, it is important to check your eligibility so as to avoid getting your loan application getting rejected. One can check for the eligibility criteria of the lenders on their digital platform or on LoansJagat portal.

     4.Check your Credit score

Being a first-time borrower, it is certain that your credit score is not worthy at all. Lenders prefer borrowers having a good credit score as it defines their creditworthiness and also gives a sneak into their past repayment history. Personal loans can do a lot of good to your credit score if managed properly. Short term personal loans are your best bet to gradually amp up your credit score and pave way for future borrowings. Try to co-apply for a personal loan with someone who has a better credit score as the lenders take the CIBIL score of both the applicants into consideration.

    5. Keep the documents ready

Personal loan documentation is minimal but the loan applicants must submit all the requisite asked for documents alongside the duly filled application form. One can submit the soft copies of the documents either online on the digital platforms of the lenders or by physically visiting them and submitting the hard copies. Keeping all the documents ready fastens the loan processing.

    6. Opt for pre-approved loan offers

Various lenders offer pre-approved personal loan to their customers. To avail one, you can contact your bank and ask for all the required details. A good relationship with the lender and decent financial stats helps in grabbing a good interest rate deal.

    7. Thoroughly go through the terms and conditions of the loan agreement

This may seem a tedious task, but being thorough with the loan agreement is very important. Your loan agreement entails all the information about your loan, and hence it is very important to go through it before signing it. In case of any doubts, one can get in touch with the lender and get it sorted.

 

    8. Personal loan balance transfer

First-time borrowers may have to begin their loan with a higher interest rate deal. But after repayment of personal loan for over a year, one can go for personal loan balance transfer and switch to a lender with better interest rate offering.  This helps in saving some money which would have otherwise gone as interest.

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