While looking for a personal loan, it is usually not about how to get a personal loan but how to get the best loan offer. Numerous NBFCs offer personal loans, each claiming to be better than the others. However, it is up to the prospective borrower to do due diligence and ask a few critical questions before finalising their decision.Â
Here are the ten most serious questions one must ask the lender before taking a personal loan.
- What is the loan amount I am eligible for?
Most lenders have a minimum and maximum loan amount to offer. The loan amount one is eligible for depends on the applicant’s credit score, income, and financial obligations.
- What is the minimum interest rate I may get?
The lenders may offer different interest rates to applicants, depending on their eligibility, repayment capacity, and credit rating. The applicant must know how to calculate interest on a loan to make an informed decision.
- How to get the lowest interest rate on my loan?
The lower the risk involved, the lower the interest rate one may get. Applicants may get the lowest interest rate by improving their credit scores, reducing their DTI ratio, and maximising income sources.
- Is the loan 100% collateral-free?
Many NBFCs offer collateral-free personal loans but may ask for a guarantor or security. A collateral-free personal loan should be 100% unsecured without any such guarantees.
- What are the fees involved?
Besides the loan amount and interest rates, borrowers are supposed to pay some fees to process and avail of the loan. Ask about these fees and extra charges beforehand to avoid any surprises.
- How much time does it take to get my loan disbursed?
NBFCs that support 100% online procedures can process loans in minutes. Every step in the loan process is online, automated, and digital. These NBFCs can approve loans in minutes and disburse them in 24 hours.
- What are the end-use restrictions for personal loans?
As their name suggests, personal loans are the borrower’s money, which they can use however they want. The lender should not impose end-use restrictions on personal loans, provided they are using them for legal purposes.
- How to calculate EMI for a personal loan?
The EMI depends on the loan amount, interest rate, and repayment term. Apart from the manual calculation method, one may also calculate the EMIs using an online personal loan EMI calculator.
- What is the personal loan repayment term?
Many NBFCs offer flexible repayment terms to their borrowers ranging from a few months to years. One may calculate the EMI first and then select a loan tenure according to their monthly budget.
- How can I reach the lender for any assistance?
Customer service is a crucial facility a lender must provide to their borrowers. Whether one wants to know how to get a personal loan or needs assistance at any step, their customer representatives should be available via multiple platforms, including chat, email, phone, etc.
Review these questions before applying for a personal loan, based on which one may decide if the loan is the right product for them or not. These questions make the final decision easy without stressing the finances.