MAINTAIN A GOOD CREDIT HISTORY
Your credit score, or CIBIL score, reflects how reliable you are as a borrower based on your past repayment history. Scores range from 300 to 900, and a score above 685 is generally considered favorable. A low score may lead to your application being rejected or result in higher interest rates. To keep a good credit score, ensure timely payment of dues. This can be aided by setting up automatic payments. It’s also a good idea to limit the number of credit cards you use and avoid using more than 30% of your available credit. To know more about licensed money lender Singapore
COMPARE INTEREST RATES
Interest rates vary across lenders, so it’s wise to compare rates from different institutions to secure the best deal. Platforms like Paisabazaar, BankBazaar, and MyLoanCare make it easy to compare rates. By finding a lower interest rate, you’ll reduce your monthly EMI (Equated Monthly Installment) burden. Additionally, check if the lender offers fixed or floating interest rates to find what suits you best. Fixed rates remain constant, while floating rates may change over time, impacting your monthly payment.
ASSESS ADDITIONAL FEES
Aside from interest rates, loans come with other costs such as processing fees, prepayment penalties, and late payment charges. Each lender has different fees, so understanding these can help you get a clear picture of the total loan cost. For instance, some lenders might charge for early repayment, while others have strict late fees. By knowing these fees upfront, you can better manage your finances and decide whether the loan is affordable in the long run.
CHOOSE THE RIGHT LOAN AMOUNT BASED ON YOUR NEEDS
Identify your financial needs before applying. A personal loan can be used for various purposes, like buying a car, paying for a wedding, covering medical expenses, or taking a holiday. List and prioritize your needs to decide on the appropriate loan amount. Taking only what you need can prevent you from over-borrowing. If your financial needs are unpredictable, a Flexi personal loan might be a suitable option, allowing you to withdraw funds as needed and pay interest only on what you use.
PLAN FOR REPAYMENT
Have a well-defined repayment plan before you take out a loan. You can route additional income from investments toward paying your EMIs. Calculate your monthly EMI with a Personal Loan Calculator to get a sense of your payments in advance. Ensure that your income and financial stability allow you to comfortably cover these payments. It’s also important to consider existing debt or other financial obligations so you don’t end up overwhelmed by multiple payments.
BEWARE OF MISLEADING OFFERS
Some lenders may advertise low-interest rates or special schemes that seem attractive but may have hidden costs. Often, these loans come with variable or floating interest rates, which can look low initially but may increase over time. Hidden charges are sometimes buried in the fine print, making the loan more expensive than expected. Always read the terms carefully and choose a lender who is transparent about fees and charges.
