With everything that is done online, banking has also evolved. With online banking, you can get all banking services from the comfort of your home, plus it’s safer, faster and easier. That being said, many people today apply for loans online. Especially personal loans because they are easy to apply and have lower interest rates. So, are you planning to apply for a personal loan online? If so, then you are just a few clicks away from getting one.
But before you apply for a personal loan online, you need to know the answers to some questions about eligibility, interest rates, and your credit score.
To make sure you’ve covered all the basics, here are five questions you need to ask yourself before applying for a personal loan online:
- How much should I borrow?
The first question you need to ask yourself is how much do you need and how much can you repay. Because a personal loan is taken out to overcome a financial crisis or emergency, but the loan itself will become a financial crisis if you borrow more than you can repay. So, asking for the right amount is your responsibility. At the same time, the lender or financial institution decides your borrowing limit and the amount that will be offered to you based on your creditworthiness.
- Am I eligible for a personal loan?
Before applying for a personal loan, ask yourself the question: do I meet the eligibility criteria for a personal loan? It would be best if you assess yourself before the lender does to plan your future decisions accordingly. The personal loan eligibility criteria consist of simple parameters such as the borrower must be a salaried employee and have a decent credit score. So check if you qualify all the parameters and then apply for a personal loan online.
- Are there other types of personal loans? If so, which one would be the best for you?
This is one of the most important questions you should just ask. Some financial institutions and banks offer two types of personal loans which are secured and unsecured personal loans. Secured debt is a loan held by collateral or an asset that the lender can seize if you don’t repay. In contrast, unsecured debt is guaranteed without any asset considered collateral. So, it mainly depends on your income, your credit rating, your current debts and many other factors.
- How much will I take to repay the loan?
You need to decide for yourself whether you want to go for a long term loan or a short term loan before applying for a personal loan online or offline. A long term loan has a lower EMI and is paid off over a longer period. On the other hand, a short-term loan can take a toll on your monthly income for a while, but it helps you get rid of loan payments faster.
- What is the interest rate?
The lender or bank charges interest on the amount you borrow from them. It is advisable to know your NDE before applying for a loan as it allows you to plan your monthly budget accordingly. Thus, when you take out a personal loan, you must repay the principal amount as well as the resulting interest. This interest rate will vary depending on the amount borrowed, your creditworthiness and other factors like income, existing loans, credit rating, etc. So, it would be better to use an EMI calculator to check the interest rate before applying for a personal loan online.
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Taking out a personal loan online is easy, but the tricky part is managing it without letting IMEs interfere with your day-to-day spending. Therefore, it is very important to ask these five questions before making the final decision. To make the process flawless, you can go for reputable banks like Axis Bank which offer safe and smooth online banking and lower interest rates!