Be it personal needs – like taking a vacation or paying your child’s tuition fees, or business needs like bridging a cash crunch – with a personal loan, you can address all your financial goals with ease. However, owing to its unsecured nature, many lenders are likely to charge a steep interest rate on your sanction. To get an instant personal loan that is also easy on your pocket, scout for lenders who offer personal loans on customized terms. This will not only allow you to get a fast sanction on an amount of your choice but will also make your personal loan EMI affordable.
Take a look at the following five golden rules that you must observe when availing of a personal loan.
Build and Maintain a Good Credit Score
A CIBIL or credit score is a snapshot of your creditworthiness. It ranges from 300 to 900 and is calculated based on your credit history. A credit score above 750 is considered good and means that you have been prompt in repaying your dues and also have some experience with credit in the past. Since this indicates that you are a responsible borrower, you are in a better position to negotiate the terms of a loan you are availing.
On the other hand, a score below 750 is considered as a low credit score and signifies either that you don’t have much experience with credit or have missed EMIs or defaulted on repayment in the past. As a result, lenders may either charge higher interest rates or even reject your loan application. So, maintaining a good credit score by repaying your EMIs and credit card dues on time and in full and apply for an instant personal loan once you have a good score.
Read Fine Print Before Signing TheDeal
Every loan is governed by a list of termsand when availing a sanction, you need to sign the loan agreement entailingthese norms. Apart from the loan amount, interest rates, and tenor, theagreement also mentions details such as cheque bounce penalty, foreclosure andpart-prepayment charges, penal interest on late EMI payment, and others. If yousign the agreement without reading these terms, you may have to deal with uglysurprises and pay undue charges for minor things.
Borrow Only What You Can Repay
The monthly repayments youmake on your loan in the form of personal loan EMIs are ruled by the terms atwhich you avail the sanction. Failure to pay personal loan EMIs attracts penalinterests as well as impacts your credit score adversely. Therefore, you shouldonly apply for such an amount that you can repay comfortably. Also, choose atenor over which you can make convenient repayments without straining yourpocket. Use the personal loan EMI calculatorto arrive at an affordable EMI before you sign up.
Also, keep in mind that while you may be eligible to avail more than one personal loan from different financial institutions at the same time, do so only if you have the ability to repay all the loans on time. All in all, consider your financial obligations and income before applying for a personal loan.
In case of a sudden unfortunate incident, your liabilities are directly transferred to your dependents. While small loans may not be burdensome, big-ticket loans may put your dependents in a difficult position. Thus, it is imperative that you avail life insurance, preferably a term policy, to cover your financial responsibilities. This way, your dependents can repay the big-ticket loan through the insurance with ease. When applying for a term plan, don’t just consider the loan amount, but also other financial responsibilities.
Watch Out For Interest Rate Fluctuations
Interest rates on loans fluctuate according to the RBI policies, whichhave a direct bearing on your repayment. Higher the interest rate, higher yourEMIs. Therefore, as a borrower, it is your responsibility to watch out for thefluctuations in your applicable personal loan interest rates and manage yourrepayment accordingly. So, read the interest rate reset clause on your personalloan carefully and choose between a fixed interest or fluctuating interestpersonal loan. In case you cannot accommodate an interest rate hike in yourbudget, think about refinancing your personal loan with a lender that offers comparativelylower interest rates. This way, you can save on interest.
In addition to these golden rules, keep in mind other important things before taking a loan, such as personal loan eligibility criteria. You can use your lender’s eligibility calculator to see if you qualify for a loan. When scouting for personal loans, apply with lenders like Bajaj Finserv to enjoy easy sanctions on high-value loans of up to Rs.25 lakh at affordable interest rates. With such a hefty sanction via quick approval and disbursal within 24 hours, you can fund all your requirements on a timely basis. You can also avail this sanction as a flexi loan and enjoy flexible withdrawals and repayment to save up to 45% on EMIs. To get an instant personal loan, check your pre-approved offer and enjoy customised deals on loans and other financial services via a hassle-free online approval.
The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. 50% for Needs: Allocate 50% of your income to cover essential needs such as rent/mortgage, utilities, groceries, transportation, and healthcare.
The lender will typically follow what is called the Five Cs of Credit: Character, Capacity, Capital, Collateral and Conditions. Examining each of these things helps the lender determine the level of risk associated with providing the borrower with the requested funds.
The principal is the total amount of money the borrower still owes, less additional fees. Interest is a charge the borrower has to pay for borrowing the money. The Annual Percentage Rate (APR), expressed as a percentage of the principal debt, often determines this sum.
This review process is based on a review of five key factors that predict the probability of a borrower defaulting on his debt. Called the five Cs of credit, they include capacity, capital, conditions, character, and collateral.
When your bank balance is looking healthy after payday, it's easy to overspend and not be as careful. However, there are several issues at play that result in people relying on borrowing money, racking up debt and living way beyond their means.
1 is never lose money. Rule No. 2 is never forget Rule No. 1.” The Oracle of Omaha's advice stresses the importance of avoiding loss in your portfolio.
Different models such as the 5C's of credit (Character, Capacity, Capital, Collateral and Conditions); the 5P's (Person, Payment, Principal, Purpose and Protection), the LAPP (Liquidity, Activity, Profitability and Potential), the CAMPARI (Character, Ability, Margin, Purpose, Amount, Repayment and Insurance) model and ...
The sound principle of lending is not to sacrifice safety or liquidity for the sake of higher profitability. That is to say, that the bank should not grant advances to unsound parties with doubtful repaying capacity, even if they are ready to pay a very high rate of interest. Such advances.
Capacity refers to your ability to repay the loan. The prospective lender will want to know exactly how you intend to repay the loan. The cash flow from the business, the timing of the repayment, and the probability of successful repayment of the loan will be considered.
Your credit score, income and debt are usually evaluated by personal loan lenders to see if you qualify. Some lenders may also consider your work history or education. Credit score and report: Your credit score is the main factor lenders use to determine your creditworthiness.
Every late payment shows up on your credit score and having a history of late payments combined with closed accounts will negatively impact your credit for quite some time. All you have to do to break this habit is make your payments on time.
If you've ever wondered what the highest credit score you can have is, it's 850. That's at the top end of the most common FICO® and VantageScore® credit scores. And these two companies provide some of the most popular credit-scoring models in America. But do you need a perfect credit score?
The three golden rules of accounting are (1) debit all expenses and losses, credit all incomes and gains, (2) debit the receiver, credit the giver, and (3) debit what comes in, credit what goes out.
The “Golden Rule”—“Love your neighbor as yourself”—is doubtless the most widely known and affirmed ethical principle worldwide. At the same time, it has its serious, quasi-serious, and jocund critics.
If you find yourself in this situation, consider the “Rule of Three:” When you have an unexpected windfall, put 1/3 of the windfall towards paying down debt, 1/3 towards long-term saving and investing, and the remaining 1/3 towards something rewarding or fun.
The rule is that a third of your take-home income should be used towards your home, a third for living expenses, and the last third should be for savings and investments.
Introduction: My name is Tish Haag, I am a excited, delightful, curious, beautiful, agreeable, enchanting, fancy person who loves writing and wants to share my knowledge and understanding with you.
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