Let’s assume you want to clear an existing loan or buy something like an expensive phone, laptop or you have some extra expenses coming for which you might need more cash than you already have, you would need a line of credit that is quick and easy to access. Personal loans are the first go-to for almost all individuals as it does not require any collateral.
But consider these two important things when planning to opt for a personal loan. First, you have to have a strong credit score for personal loans. Second, you need to do your research about interest rates, repayment options, etc. So, firstly, you have to check your creditworthiness.
Before applying for a personal loan, you have to ensure that you have an excellent CRIF credit score with a good credit history. Making a hard inquiry will bring down your score by a few points anyway, so make sure your score is strong enough to bear that.
Related Reads: 7 Rules to Follow When Taking a Person Loan
5 Tips to find the perfect personal loan
1. Research well on loans and lenders and know the restrictions:
We live in the world of the internet so information is not difficult to come by. But don’t end your research so soon. Take your time and investigate the range of interest rates available, the kind of loan repayment schedules available etc. This will help you understand your requirements better and arrive at a well-informed and suitable personal loan.
2. Check out a personal loan calculator:
You don’t know how much of a loan can you get till you apply for it. This is where a personal loan calculator will do you good. In addition to that, personal loan calculators also provide you with the available options. This will help you choose wisely and clearly.
3. Stay away from predatory lenders, go for peer-to-peer lending instead:
Never forget to compare interest rates and loan terms before you finalize one. It is also important to compare customer experiences, reviews to get a critical sense of how the lending institution treats its customers once the loan is disbursed. In case of any emergency or unfortunate incident, how quickly does the institution or bank respond to your queries? It is necessary to turn all the cards. It also plays a role in identifying if the lender is ethical or not.
4. Be sparing with your inquiries:
Every hard inquiry brings down your score and it gets recorded on your credit report as well. So be careful when it comes to making an inquiry. Don’t make an inquiry if you have placed requests for any other kind of loan in the recent past. If you are planning to window shop, then make sure all your inquiries are for a personal loan and fall within a span where it can be considered as one inquiry.
5. Build a better credit score and credit history:
If you have a good credit score with a disciplined credit history, then applying and picking a new line of credit will be easy for you. It could also be beneficial in bringing you low-interest rates and help you negotiate your loan terms as well.
To get your journey started, take the first step in picking the perfect personal loan and check your Credit Score.