7 Questions to Ask Before Taking a Personal Loan

When you need funds urgently and without having to worry about pledging any collateral, then you are likely to avail of a personal loan. You can use a personal loan for any purpose and the application process is quite straightforward. Hence, personal loans are quite popular. However, it is important that a borrower has complete clarity about personal loans. This is important so that you do not have to face any unpleasant surprises. Doing detailed checks of all terms and conditions may be time-consuming, but this is an important step towards a healthy financial future

Here is a list of personal loan related questions which a borrower must ask:

1) What do I Need the Loan for?

This is the first question to ask yourself. You need to ask yourself if your personal loan is meant for an emergency need, or something which is optional and/or can pose a risk. It is good to have this self-awareness so that you do not regret it in the future. For instance, taking a personal loan to invest in the stock market may not be a good idea at the moment if your income is not stable. On the other hand, it could be a good solution in case of a medical emergency, or to bridge a small gap and realize a long-awaited dream, such as the downpayment on your home loan, or children’s education. With SMFG India Credit, you have the flexibility of choosing to repay your personal loan within a tenure of 12 months to 60 months.

2) What is my Personal Loan Eligibility?

SMFG India Credit offers a personal loan eligibility calculator. Personal loan eligibility is different from person to person. Few of the main criteria are the stability of your income source, and the amount of disposable income. Your credit score is also expected to be good. A Few other factors like your age, credit history, work experience, etc are also taken into consideration. SMFG India Credit personal loan eligibility calculator gives you clarity in a few seconds when you key in all the details.

Must Read: Things to Remember for First-Time Personal Loan Borrowers

3) Lender Related Assurance

Many financiers offer personal loans at attractive rates and interesting features. Sometimes it is even tempting to accept a personal loan using one of the new loan apps from your mobile phone which claims to give the best possible deals. But it is extremely important for you to know about who exactly is offering to lend to you. It is advisable to find out the lender’s experience in this field and the experience people have had with the lender. It would be advisable to go with a lender which is registered with the RBI, has a wide physical presence and robust technical support. It is also important to go through the terms and conditions carefully before signing any loan agreement, so that you know exactly how much EMI you are supposed to pay, and for how long.  

4) EMI Affordability

Interest rate is certainly a luring factor when it comes to personal loans. However, the flat rate that is mentioned could be misleading at times. Sometimes there are hidden charges in the loan, which may increase your rate. You can get a fair idea of your monthly EMI by calculating it yourself on SMFG India Credit’s website. With this, you can decide on a suitable tenure so that the monthly EMI fits within your budget. With SMFG India Credit, you can get a personal loan interest rate starting 13%. 

5) Other Charges

Personal loans charge prepayment penalties/foreclosure charges. This is a fee that is charged by lenders if you wish to pay off your loan early, or transfer out the balance of your ongoing loan to a different lender. Personal loans also come with additional charges that are over and above the interest rate. Some of these charges include processing fees, service fees, and insurance charges. It is important to check the charges before you sign up. Penalty charges may also be levied in case of cheque bounce, or late / missed payments.

Must Read: Smart & Right Ways to Use a Personal Loan

6) Documentation List

Personal loan providers require certain documents to process your application. It is better to ask for the entire document list so that there is no wastage of time. If you are applying online, it is advisable to gather the documents and scan them, so that they are ready for upload. SMFG India Credit personal loan documents list is simple. It includes KYC documents, PAN,  salary slips for the last three months for salaried individuals and income proof / financial statements for self-employed individuals and bank statements for the last six months. Additional documents may also be requested on a case-to-case basis. For instance, if you are applying for a doctor loan or with a co-applicant, you may need to provide additional documentation for the same.

7) Procedure to Apply for the Personal Loan

It is important to find out the exact step by step procedure for the personal loan. You may also want to find out the number of days it will take the financer to sanction the loan. SMFG India Credit offers an instant personal loan that can be applied online with a few clicks. When you go on the website, you just need to Click on apply now, select Personal loans, verify your mobile number , enter the requisite details, upload the requested documents, and then submit the application. After a speedy verification and approval process, the loan amount would be disbursed to your account within hours. The Application of personal loan online makes the process extremely easy. Applicants who get in-principal approval also get a tracking ID so that they can check the status of their application online.