In today’s unexpected world, many expenses come in the form of surprises and an individual may or may not be prepared for the same. In such cases, instant personal loans are the best options to fall back on. These loans are personal loans and do not have restrictions on how the amount has to be utilized by the borrower. Therefore the funds from these loans can be used for any expenses by the borrower.
The utilization of these personal loan expenses can be for a one-time debt, consolidated debt or a household expense. One of the major reasons why these loans are availed is because of any medical emergencies that have occurred for the borrower. Borrowers also use these loans for the purpose of resolving any issues in the short-term cash flow.
After Covid-19, many people are hesitant to visit banks or any lending institutions and this is when the digital lending platforms have made business and played an important role in the lending industry. The personal instant loan is collateral-free and thus it is essential to assess the loan carefully before availing it.
Some of the DO’s are
Comparing two loans
It is essential and compulsory for a borrower to compare loans before availing of any specific loan from the industry. The rates for two loans should be compared as personal loans have higher interest rates and they cover both interest and the principal component. The personal cost of borrowing can be compared using an EMI calculator and the loans can be compared on an overall basis by the borrower. The borrower should go with the least interest rate.
Choosing a tenureI
t is important to choose a proper tenure for the loan. A longer tenure means the overall cost of the loan is decreased and the EMIs will be more. On the other hand, a shorter tenure indicates a decreased EMI. The borrower should make sure that the lender does not charge any fees to the borrower in case of foreclosure of the loan.
Calculating the overall cost
The overall cost of the loan can be calculated using the EMI calculator. The calculator can be used after entering the loan amount, the desirable loan period and the interest rates. In this way, the borrower can choose the best loan that meets the requirements of the borrower.
Check : Personal Loan EMI Calculator
Checking budget
The borrower should check the monthly budget and their obligations before applying for a loan. If there are loans that are outstanding and not yet paid for then the borrower should re-examine the desire to opt for another loan.
Paperwork and terms
Before applying for a loan the paperwork that is needed should be checked by the borrower. Even though the key papers are the only documents that are needed by the lender from the borrower, the borrower should check the required paperwork and the lender who requires minimal paperwork should be selected. The terms and conditions related to loan documents should be evaluated before availing of a loan. The borrowers should check whether any fees or extra charges are levied by the lender which further increases the cost of the loan.
Examining the lender
Even though the lenders give very attractive offers to borrowers on digital platforms, it is necessary that the borrower should examine the validity of the lenders that are lending via these platforms. The lenders should have a permanent office address and other documents on the website. The borrower should evaluate all these aspects before applying for a loan from the lenders. Many people have faced harassment and thus this is a cautionary step that has to be taken before availing of a loan.
Some of the DON’TS are
Applying for too many loans
If the borrower applies for too many loans at a single time, then the credit score decreases and the lender will not have a very positive image of the borrower. A credit score decrease for the borrower is not something that the borrower wishes for and it can have a bad impact on the credit report for a very long period of time. Also, if the credit score is low, then the lender will also not favor giving the loan to the borrower. The monthly budget of the borrower should be evaluated before applying for a loan. The lender should never have an impression that the borrower is credit hungry and that is the reason why the application for too many loans should be avoided.
Don't miss out on EMIs
EMIs for personal loans should not be missed by the borrowers. A penalty can be levied by the lender if the borrower misses on the EMIs of personal loans. Since personal loans have high-interest rates, the penalty for non-payment of EMIs is also higher as compared to other loans. Missing EMIs also lead to a decrease in credit scores and the eligibility to avail of a personal loan in the future.
Conclusion
Since unsecured loans do not require any form of security they are easy to avail and the borrower can make the maximum use of these funds. The disbursement for these loans is instant and thus they are favorite amongst the youth of the nation. Some of the above do’s and don’ts should be kept in mind before applying for these loans and they can actually act as a blessing in disguise and also one of the best forms of debt a borrower can get.
FAQS of Do’s and Don'ts for An Instant Personal Loan in India
1:What is the turnaround time for instant loans?
Instant loans are disbursed almost instantly and the average time is around 72 hours.
2: Do instant personal loans require collateral?
No, instant personal loans do not require any form of collateral.
3:Is credit history required by the lenders of instant loans?
Yes, valid lenders of personal loans will always check the credit history of the borrowers.