5 Golden Rules to Follow While Taking Personal Loans

1. 5 Golden Rules to Follow While Taking Personal Loans.

2. Ideally, we think that everybody would have enough money for all his needs but in reality, most of us have little to no option when any emergency situation struck, but to borrow to meet our needs. Personal loans are a simple way to provide a financial need that can arise at any time. Whether it is a long-awaited home renovation, pay your credit card bills, medical exigency, or even purchasing a gift for wedding, easy personal loans can get you out in a jiffy. Well, the loans are unsecured which clearly signifies that you don’t have to give any collateral to any lender, and are processed very quickly.

3. In addition to all this, technology has changed several things in the lending industry. The online aggregators have become the Usain Bolt in the financial world, as their loan approval process is quick, without any hassle. Most of the lenders’ have a dedicated staffs that help you to disburse your loan amount within minutes. You would actually find so many lenders online offering easy personal loans at appealing interest rates, and making it super easy for you to apply for it.

4. Well, here we are listing out 5 rigid golden rules that a borrower must keep in mind while taking personal loans online: • Borrow in Limit: This is the first rule of borrowing, always borrow the loan amount that you can easily repay it. Don’t go beyond your means. Just don’t take a loan because it is easily available, always check your loan to income ratio before applying for personal loans.

5. Keep Tenure Short: - The longer the tenure, the lower is the EMIs, which makes it very tempting to go for the long term. However, it is advisable to take personal loans for the shortest tenure you can afford. A borrower with a low income won’t be able to borrow enough if the tenure is short. Hence, he or she would have to increase the tenure so that the EMIs fit in his or her pocket. What best you can do in that situation is to increase the EMI amount, in every six months or a year in line with an increase in your salary.

6. Timely Repayment: When it comes to repayment of dues, you have to be disciplined, whether it is a short term debt like paying your credit card bills or long term debt. Just make sure that you don’t skip or miss any repayment because missing an EMI or delaying in payment is among the key factors which affect your credit score. Hence, it can hinder your chances of taking personal loans in the future for other needs in life.

7. Don’t borrow to invest: - this is the thumb rule of investing, that never use the borrowed money for investment, why? Because your safe investments like fixed and recurring deposits won’t be able to match the rate of interest you pay for the loan amount. In addition to all this, don’t use your loan amount to invest in the financial market such as stocks as it is highly volatile in nature. The moment market crash or declines, and if you suffer losses, you would be strapped with a EMIs as well.

8. Understand the small font: - A borrower must read the loan documents while applying for easy personal loans. There are paragraphs after paragraphs in a small font which can be a put off but we recommend you to always read the legalese agreement before signing and submitting anything online. Hence, always read all the terms and conditions in order to avoid any unpleasant surprise in the last moment. Well, these are the major 5 rules that an applicant or a borrower should follow while applying for personal loans online. Hope the information helps!

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