Personal loans are resourceful. You can use it to cover all your unplanned monetary emergencies. Making mistakes while picking up a personal loan will always end up as a costly lesson. Be it investing or paying of your debts, financial moves in your life must always be analyzed thoroughly. Taking a personal loan without prior study will burden you with hefty loan repayments and may affect your financial health.
Today we will look at the mistakes you should not commit while taking a personal loan. If you stick to these don’ts, they could save you from splurging money in the process.
Homework – The Key Element
If you are thinking to apply for a personal loan, learning a little from others could save you a whole lot of money. There’re awful choices for personal loans out there. So avoid taking the first loan that comes your way. Play around with lenders, their fees & rates, and tenure. This will help you to pick the best lenders with reliable terms. Compare the loan options. It furthers sieves these options and you can choose the best that works with you. Don’t blindly believe in your agent’s’ suggestions, do your research and make an educated decision.
CIBIL Score – The Decision Maker
Your CIBIL Score is one of the vital decision makers of your personal loan. If your score is good enough it will give you the chance of achieving a lower finance rate and a lower credit number could easily get your loan application rejected. However, some lenders do finance users with low credit score, but checking your credit score and maintaining a decent number is always beneficial. Do you have a good credit report? Then you’ve nothing to worry about. Just track down the best available lending options and submit your loan application. Even if you’ve low credit score, you can improve it in many ways.
Borrowing More – A Big No-No!
Borrowing more than your capacity of repaying will always land you in trouble. Before planning on taking a loan, ask a few questions to yourself:
- Why do you need to take a loan in the first place?
- How do you plan on spending it?
- Can you afford to repay it back in a limited period?
While looking out for a loan always consider your financial status and your ability to repay. This will keep your head above the water and will also aid you run your other expenses smoothly.
Lying – The beginning of Trouble
Lenders will always look for credible borrowers, who they can lend money and be sure in getting it back. So, it is very naive to provide falsified information or to hide stuff from your lender. Always remember, Lenders are incredibly good at catching your lies. They are better at what they do and they might seen thousands of loan applicants. You probably don’t need to lie – there’re many ways to get your loan approved at a decent interest rate even if you’re in a less ideal situation. So approach such lenders who’re lenient to CIBIL Score and allows you to borrow more.
You must not lie & here’s a list of common lies people tell while taking a loan:
- Not declaring immediate family.
- Not mentioning about your existing loans.
- Not disclosing the real purpose of a loan.
- Submitting someone’s assets as a collateral.
- Falsified data about your income and employment.
And banks can and will always catch lies. They have many ways to catch such frauds and will terminate or outrightly reject their loan application. So, stay honest with your lender.
“Borrowed responsibly” can always be your loan’s story
To sum up, we commit mistakes regularly and learn from them. But, when we’re dealing with money you don’t need to commit them to learn. Take it from here. Do your own research, shop around & look for better lending options but always remember to borrow within your reach.