5 Things to Check While Taking a Personal Loan

Today, taking out a cheap personal loan has become easier than ever before. A number of banks and NBFCs have mushroomed over the last three years, because of which personal loan disbursements have increased at a rapid pace. Most of these institutions are also taking the help of technology to both strengthen their loan application process as well as accelerate the loan disbursal time. This, of course, is welcome news for salaried professionals. It is not uncommon for them to suffer a financial crunch due to unforeseen expenses or sudden emergencies. In such cases, an instant personal loan can provide you with much-needed funds in a short span of time. Even so, there are a number of factors that are worth considering before borrowing a personal loan. Read on:

1. Eligibility

Before you can avail a personal loan, you need to check if you’re eligible for one. Most financial institutions have their eligibility criteria listed on their website. They also have something known as a “Loan Eligibility Calculator” where, after entering certain basic details, you can get an idea of the loan amount you may be eligible for. Your eligibility depends upon factors like your monthly income, repayment capacity, and most importantly, your credit score. All lenders check these things before sanctioning your loan.

2. Rate of Interest

This is undoubtedly one of the most important factors, if not the most important factor you must check for while availing a cheap personal loan. Based on your credit score, you will usually be offered interest rates anywhere between 8% - 16% per annum. It is always a good idea to compare rates with as many financial institutions as possible because you stand a chance of getting a loan at a cheaper price than you first expected. KreditBee is one such platform that offers instant personal loans at low interest rates.

3. Repayment Capacity

Are you in a position to pay your personal loan EMIs on time? This is one question you must ask yourself before even thinking of taking a loan. This is not to say that all lending institutions don’t ascertain this for themselves – they compare all your sources of income and ensure that you earn enough to repay your EMIs as and when required. You don’t want to lose money paying late payment charges, so borrow a loan only if you’re sure you can repay it on time.

4. Foreclosure Charges

Foreclosure charges refer to the fee that the lending organization charges you in case you pay off your personal loan early. This is because early repayment prevents them from earning the interest income, as per the original terms of the loan. It is a good idea to pick out loans that have lowe foreclosure charges in addition to low interest rates.

5. Repayment Options

Most lenders auto-debit your bank account by the EMI amount every month. If you’re not comfortable with such an arrangement, then it makes sense to find other lenders who provide a wide range of repayment options. KreditBee, for example, allows customers to repay their loan EMIs on their mobile app through various options - Net Banking, Debit Card, UPI and even Paytm Wallet.

In conclusion

The above factors are among the most important you must consider while taking out a personal loan. If you require a cheap personal loan that’s instant and really accessible, KreditBee is a good option you can consider. The entire loan application process, from profile creation to disbursal does not take more than 15 minutes, and it is completely online on the KreditBee mobile app. You just need to download the app from the Google Play Store, complete your profile, and relax. If you wish to learn more about our personal loans, please write to us at [email protected] or simply call +080 44 292 200

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