One crucial aspect of your financial future planning is to account for unexpected expenses. Unexpected expenses like financial emergencies might occur at any time. Medical expenses, house repairs, and family emergencies are a few instances of financial emergencies.
Emergency situations are unavoidable, but they may be lessened by learning how to borrow money responsibly and safely. These are five suggestions to help you borrow better, smarter, and simpler.
Look around before taking out loan features. Opt for the finest terms for the loan, the lowest costs, the cheapest interest rate, and the most excellent possibilities for repayment.
If this is your first time taking out a loan, familiarise yourself with the process. The majority of loans have an adjustable or fixed interest rate. Even though the interest rate on a fixed-rate loan may be greater, the payments will be predictable and simpler to plan for. Although the interest rate on an adjustable-rate loan may be cheaper initially, when the rate changes, your monthly payments may go up.
Loan Against Fixed Deposits
Rather than breaking fixed deposits (FDs), you might obtain personal loans against them. It is set up essentially like an overdraft account. Therefore, the amount is only adjusted against the FD if you fail to pay it by the time it matures. These online account saving loans have no limits on how they are used in the end or prepayment penalties.
Borrow Only What You Can Pay
Make sure you can pay your monthly dues before taking loan features. By doing this, you may avoid taking on excessive debt and ruining your financial strategy. Additionally, you should never borrow money impulsively or without careful planning. Generally speaking, your monthly income should not exceed 20% of your overall debt.
Check your Credit Score
Your likelihood of successfully applying for personal loan hinges on your credit score, also known as a CIBIL score. This numerical representation, ranging from 300 to 900, serves as an indicator of your creditworthiness and is calculated based on your credit payment history across various loan mobile banking types over time. Most banks prefer applicants with a credit score above 700, ensuring they possess a solid repayment capacity.
To check your credit score, visit the official CIBIL website, navigate to the ‘get CIBIL score’ tab, and follow the provided instructions. A favourable to excellent score significantly increases the probability of your loan application being approved.
Know the Eligibility Requirements Set by the Lender
Various banks and lending institutions establish distinct eligibility criteria for personal loans. While standard factors like credit score, age limit, employment type, a three-month bank statement, and minimum salary or income are commonly considered, some lenders may introduce additional requirements. IDFC FIRST Bank, for example, outlines its specific eligibility criteria on its official website to assist you in understanding the prerequisites for loan features approval.
If you are seeking a quick loan option, an instant personal loan might be a suitable choice as it is disbursed within a short period. IDFC FIRST Bank approves instant loans and online bank account opening instant in a matter of hours or days, contingent upon the applicant and the loan application.
To determine your Equated Monthly Installment (EMI) amount, you can use IDFC FIRST Bank’s personal loan EMI calculator. Just input your desired loan amount and the duration for which you need the loan. It will help you make an informed decision when applying for loan mobile banking.