Personal loans are not like a credit card. You owe the lender a definitive amount of money to pay every month. However, it’s not all that hunky dory too. With a high rate of interest and credibility factor of the borrower playing a crucial role, it is very important to know some of the basic things about personal loans before purchasing one.
HOW PERSONAL LOANS WORK?
Personal loans are similar to any other loan wherein one borrows money at a fixed interest rate over a fixed amount of time and then pay a fixed monthly amount till the time loan is paid off.
Personal loans are unsecured in nature and work without any security. This is the reason they tend to be having a higher rate of interest. Different lenders and banks charge different interest rate and they are typically higher than you see with secured loans such as home equity or auto loans. This is because the banks are at risk lending you without any collateral.
The tenure of personal loans can be fixed as per the customer’s convenience and pay back capacity.
HOW TO QUALIFY FOR ONE?
If you are thinking of getting a personal loan, here are something which you will need to qualify:
- Good credit: An excellent credit score can get your personal loan application to be approved within no time. However, if your credit score is low, some lenders still give the personal loan but the rate of interest charged may be higher.
- Proof of ability to repay: Lenders will certainly want the assurance that you will repay the loan amount in a definite period of time. That is why they ask for financial documents like salary slip or other evidence of employment and seek bank statement of last 3-6 months.
- On-going loans: Ongoing debts can significantly reduce your chances of getting a personal loan. If you have other loans going on and your debt-to-income ratio is high, then many lenders may be hesitant in lending you the money.
However, fintech like Loans Jagat help customers to get the personal loans quick and easy without much hassle. It provides an excellent platform where individuals and businesses can get access to quick and easy funds for their personal or business needs respectively.
HOW TO PICK THE BEST PERSONAL LOAN?
Personal loans are customised in nature and there is no one size fits all option. The best loan for your needs depends on the sum you wish to borrow and your credit score. Here are some tips to help you identify a loan that fits your goals.
- Shop around with different lenders: It is very important to compare different lenders for the best rates and loan terms before getting a loan for self. LoansJagat helps you compare different lenders and is an excellent platform to explore different options. Start by filling out an online form.
- Read the fine print: Ensure to understand the terms and conditions of the loan properly. If you don’t understand anything, get your doubts cleared by asking the representative of the lending institution.
- Look for a low-cost loan: Do the research properly and go for a personal loan with the lowest rates and best terms. P
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