Financial obligations can sometimes be unforeseen, and instant personal loans can be a brilliant solution for such situations. These loans can help you out in any scenario where you need money to fix an urgent problem, like a medical emergency or pre-existing debts. These are unsecured loans, but they also happen to be way easier to avail!
However, make sure that you have the full information related to the personal loan app you need to cover the following questions before you take an instant personal loan! Here is a list of some important questions.
Questions Borrowers Must Ask Before Opting for Instant Personal Loan:
Q. Why do you Need the Loan?
Certain emergency expenditures can crop up when you least expect them, but some of them might be burdens that you might be able to take care of later. Make sure your personal loan isn’t going towards something you might have managed if you could regroup your finances. Instant personal loans are higher-interest borrowings than loans like home and car loans, so make sure you aren’t taking this loan unless you need it.
Q. What are the alternatives that you should also be considering?
Lenders do not demand collateral while giving out a personal loan, but a personal loan has a higher interest rate than a car and home loan. As we already discussed, it is so since it is comparatively high-risk, so make sure that you have explored all options. For example, gold loans or loans against fixed deposits are alternatives that will not require you to pay as high an EMI every month as an instant personal loan.
Q. Are you eligible to take such a loan?
One’s personal loan eligibility depends on many factors, like the stability of one’s income, credit score, the source of their income, the amount of disposable income they have, et cetera. As is in the case of any loan, you will need to be eligible to take out a personal loan~ meaning that the lender has to be assured that you will be able to pay the loan back in EMIs.
Q. Do you have your documents ready?
Any lender will need some documents to make your loan go through, but looking for your papers at the last moment can become a very hectic task. It would be very convenient to ask for a list of the required documentation before you go ahead with applying for the personal loan. And, if your loan application is online, make sure all your relevant documents are close by, ready to be scanned and uploaded. This prep will save you a great deal of hassle.
Q. Have you researched the procedure to apply for such a loan?
The procedure for applying for a loan can snake its way through many bureaucratic levels and processes. It might get confusing, but doing the research beforehand can be a huge help. Make sure you are privy to the ins and outs of the procedure before you finally go through with applying for the loan.
Q. Can you afford to pay the EMI? Are you missing any details of the process?
You might be given a desirable interest rate, or the specified EMI might seem very reasonable, but sometimes there are nested charges that you might not be able to see at first glance. Financial institutions can be misleading. Calculate your approximate EMI independently as well before accepting a loan. If it seems beyond your means, considering other alternatives would be the way to go.
Q. What are the other hidden charges I might be forgetting to consider?
You cannot forget about charges such as processing fees, insurance coverage, service charges, et cetera when you factor in the different costs involved in your personal loan. Besides, foreclosure charges or prepayment penalties can also feature in the picture. In short, take stock of all the financial details that may involve the personal loan you are willing to take.
Q. Are you accepting a loan from a secured lender?
You might need a loan urgently, but there would still be no reason to get scammed over it. Sometimes, lenders offer attractive loans at competitively low interest rates, and it is not uncommon to be very tempted by them. But if your lender appears shady with their terms and conditions, is not registered with the RBI, or isn’t widely couched for, be smart and look for a more credible lender.