Avoid Making These Mistakes When You Apply for a Personal Loan

Updated on: 14 Dec 2021 // 11 min read // Personal Loans
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Personal Loans are used to cover personal expenses such as to enjoy a holiday at your dream destination, to buy the latest gadget or for a wedding. These are unsecured loans that are not backed by any type of asset. We all know that emergencies never announce their arrival; rather they always create havoc in our life. Applying for Personal Loan is not that easy as the bank takes time to sanction such loans.

Before applying for the personal loans, it is suggested to go through some important tips so as to avail the same within the least possible time. A tiny mistake can ruin your financial plans and would create unexpected problems later on. Here, we are illustrating some of the common mistakes that you should avoid when you Apply for a Personal Loan.

Borrowing More than What You Can Repay

You are in need of instant money but, you should know your limits. Don’t ever borrow more than your repayment capacity. These loans are not sanctioned as a fixed percentage of an asset and the sole limiting factor is your income. Use an EMI calculator and check your repaying capacity. Beware of the numbers you are signing on while applying for a loan and check whether you can pay this or not.

Don’t Make a Quick Choice

Maybe the first offer is amazing and you have made up your mind for that but check other lenders too. More often it is observed that people applying for Personal Loans are in a hurry and they don’t even focus on the offers. They just narrow down on one option without even comparing it with other available offers. Don’t commit this mistake while applying for Personal Loans. Go to your regular bank, ask for a quote and then go to some other bank and ask them for their quote; then make a choice between atleast two. Don’t take this decision in haste otherwise; you will have to bear consequences later on.

Don’t be Hesitant to Share Information

The bank will not ask too many personal questions but at least tell them the basic purpose for which you are applying for a loan. No matter what you try to hide, the bank knows how to get the details. It is advised to be honest with the bank right from the beginning and don’t hesitate in sharing information with them. Don’t ever tamper with your documents to show your creditworthiness because you cannot fool a lender in any situation.

Applying without Knowing the Bank Rules

Maybe you are a regular customer of the bank but it is essential to go through all the rules and regulations in case of Personal Loans. Check whether you are satisfying their eligibility criteria or not. Avoiding bank’s policies and procedures may generate worst results later on. So, first assess their criteria and only then take a step forward.

These are some of the common mistakes that usually people make while applying for a Personal Loan. Make sure that you avoid these mistakes so as to speed up the loan sanctioning process.


Also Read: Pre-Approved Personal Loan: All You Need to Know


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