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5 Important things to contemplate before taking a personal loan

Whatever the reason is for you to need urgent cash, a personal loan is the best choice. 

5 Important things to contemplate before taking a personal loan

Wednesday November 08, 2017,

4 min Read

Do you need money urgently to deal with a medical emergency in your family?

Do you need money urgently to repay your debt?

Do you need money urgently to pay your child’s school fee?

Whatever the reason is for you to need urgent cash, a personal loan is the best choice. It is perhaps the best option for many to access funds for their requirements because unlike a home or a car loan; you only need to give the papers of any property as a guarantee against your mortgage.

So for banks, this is slightly towards being an unsecured loan, so banks have a set criteria for the applicants and those who meet them, their loan is approved. The banks make sure the applicant is not a defaulter, and his credit history is not weak. If you meet the eligibility criteria of the banks, you will quickly get the loan for your needs.

As banks have specific criteria to ensure that they get their money back and don’t have to struggle with it, you also need to check them before accepting a loan from any bank. Also to your surprise, people needing a loan have their own rules too, and that’s pretty good. Do you have one?

Now, the question is what all rules a borrower can have. In this blog, I will discuss five things that you should consider before taking a personal loan. Consider these points as they will help you get the most appropriate loan for your needs.

Let’s face them.

Know the terms and conditions of the loan first


Would you like to take credit kept in harsh conditions? Accepting the credit on tough conditions gives an impression that the bank is offering you the loan despite you not meeting its loan criteria. Always check the rules and guidelines along with the points on the agreement paper thoroughly so that you are not stuck somewhere in the wrong clause.

Discuss the process of deferment


Knowing the deferment process is essential because if unfortunately, you are trapped into temporary cash crunch because of which you are unable to repay some installments, then what problems you will have to suffer. If you know this in advance, you would be able to prepare yourself for temporary cash crunch situations, or you will not let such a case occur to you.

Check for loans available with cheap interest rates


You reach a bank, inquire about the terms and conditions and the interest rate of the bank and then apply for it. If this is how you approach for a bank loan, you need to rethink over it because this can cause you financial loss because you never checked with the other banks, on what interest are they offering the same loan. If you don’t want to suffer that financial loss, check out different interest rates that various banks are offering and then make an informed decision.

Negotiate for the best interest rate


Though you have chosen the bank that is offering the loan with the least interest rate, as a customer, it is your right to negotiate the interest rate. Don’t forget to bargain before submitting your documents for the loan amount. Maybe you will get some more discount on the interest rate. If that does not work, there is no issue. If you are getting a cheap loan with stable conditions, you can take it.

Do not forget to read the loan agreement details


Though you have discussed everything in advance, it is essential to read every detail comprehensively before you sign on the documents. This will allow you to know if everything is as per prior discussion with the bank or it is different from what was told to you at the time of discussion of the terms and conditions before applying for the loan. Reading the terms and conditions before signing will help you to ensure you are not getting the loan in the same conditions that were promised to you.

Implementing these ideas will allow you to take the cheapest loan with the right terms and conditions and allow you to remain prepared for any difficulty if occurs because any installment skip.