The BuyT Desk
Taking a loan is one of the most significant decisions and requires long research to conclude. It has a direct impact on the financial condition of the borrower. And according to financial experts, the effects of unplanned loans stay for years with the entire family. Therefore, it should be planned astutely.
So, if you are thinking of getting a loan, here are six key points you need to consider.
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Interest Rate
You must compare every source of acquiring loans and opt for the one that offers fewer interest payments. Financial institutions such as Credenc, Bankbazaar, Paisabazaar, etc., are there to help you with the loan comparison that different lenders provide. You must carefully choose between Floating and Fixed loans. Floating loans tend to change. They are usually 1-2 % lower than fixed, based on the market condition.
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Credit Score
You need to check whether you are creditworthy to take the loan. Maintaining a good credit score portrays that you have a good history of loan repayment. Also known as CIBIL score, it ranges from 300-900. If your score is above 750, then it is an ideal situation to get a loan.
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Access The Cost
A loan comes with additional cost that includes prepayment fee, processing fee, and late fee. So, you must get an estimate of the charges that the lender might levy on the loan. You also need to plan your budget to repay the loan. You can also opt for an online loan calculator to estimate the monthly EMI payments.
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Evaluate the requirement
Do not make decisions in a hurry. You need to inspect and determine why you actually need the loan. Usually, people take loans to meet financial requirements such as buying a vehicle, wedding purpose, or address medical emergencies. Go through the list of your priorities and decide the amount that you are willing to borrow.
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Check Loan Repayment Process
Even before taking the loan, you must have the repayment planned and the source ready. Always take a loan that you can repay through your income. Are you under financial obligation? Is there any repayment of debt left? Then, you must think twice before proceeding.
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Make A List Of Your Queries
Before you borrow a loan, always try to resolve every bit of confusion prevailing in your mind. Ask yourself:
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What should be your first step to take a loan?
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What is your credit score?
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How much interest rate would be sustainable?
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What are the terms and conditions associated with the loan?
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What are the processes of repaying the loan?
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What more do you need to do?
Always try to take loans from certified and accredited loan providers. Check whether every process is transparent and never fall for any gimmicky loan offers. Try to reduce the number of credit cards and never exceed 30% credit utilization. And, always try to make payments on time and to avoid any mistakes. You can choose the automated process for payments.
