Applying for a bank loan can be a daunting experience. The never-ending paperwork, contradicting documentation process, uncompromising verification and approvals can make you nervous during a financial crisis. However, planning in advance and knowing what you are getting into can save you a lot of time.
Here are 7 things you should know to make your loan process hassle free.
1. Check your Credit Scores
Banks sanction personal loans based on your credit history. If you haven’t missed paying your bills on time, you don’t have to worry about this. A good credit score attracts higher loan amount and other benefits because you have a good reputation in the lender’s eyes. You can check your credit score online by paying a nominal fee.
2. Check your Options
We understand walking into many banks and enquiring about the loans they offer can be tedious. Make use of technology and compare loan offers online. BankBazaar website compares loan offers offered by several banks based on your eligibility within few seconds.
Banks sanction personal loans based on your credit history. If you haven’t missed paying your bills on time, you don’t have to worry about this. A good credit score attracts higher loan amount and other benefits because you have a good reputation in the lender’s eyes. You can check your credit score online by paying a nominal fee.
2. Check your Options
We understand walking into many banks and enquiring about the loans they offer can be tedious. Make use of technology and compare loan offers online. BankBazaar website compares loan offers offered by several banks based on your eligibility within few seconds.
3. Don’t ignore the boring Fees Section
Yes! We all ignore the small table with fees and charges listed in our loan document. It is very important to know the fee you’ll be charged with as it is a part of your loan amount. Choose a bank which charges less fees and charges and don’t regret after you accept the loan offer.
4. Read about Interest rates
Banks usually charges two type soft interest rates namely, fixed interest rate and variable interest rate. When it comes to personal loans, fixed interest rate is the way to go as it will remain constant and will not change in the future. To add on, variable interest rate calculation can be confusing and you will land up paying more.
5. Get a Loan Insurance
Prevention is always better than cure. Personal loan protection helps your loved ones cover repayments just in case something happens to you. Getting a loan insurance means you will have one less thing to worry about.
6. Know the Penalties
You may be a prompt payer but there may be situation where you payment aren’t made on time. Banks charge heavy penalties if you miss a payment. Check for the penalties that will be charged in case of any such circumstances. Make sure you can afford the penalties.
7. Question your Intention
Before you apply for a bank loan, ask yourself if this is need or greed. If your intention is genuine, go for it. Applying for a personal loan to gamble or invest in stocks is highly not recommended. Don’t be stuck with an existing loan when you need funds during an emergency situation. Apply for a loan only when you need it the most.
We all face financial crisis in life. Applying for a loan may be stressful but it is a great way to fund your expenses. Avoid falling for a sales pitch and base your decisions on facts and figures. Use a Loan Calculator online to check your estimated Monthly Equated Instalments and if you can afford it, go on.
