Common Mistakes to avoid while applying for personal loan
Best Personal loan is not any purpose or term specific loan as you can use the money as you want. It is a good way to restructure your unexpected debts. However, at times, some common mistakes lead to loan rejection by lenders. Avoid making such common mistakes to get your loan approved quickly and ensure that you do not slip into a vicious debt cycle.
Applying without comparing
One of the biggest mistakes people make when applying for a personal loan is that they go to the bank with which they have done the most business, without shopping around for the best deal. There are things like interest rate, processing fees, prepayment charge, loan tenure and the loan amount which may vary from lender to lender. So, it is important to research and make an informed decision to conclude the best deal. Once you carry out detailed research, you will be able to assess the pros and cons of the loans offered by various lenders and find what suits you the best.
Unable to clarify the details for taking the loan
One of the most common mistakes loan applicants make is that they can’t clarify the loan’s detail i.e. purpose, tenure and amount. Mostly it is because borrowers themselves are not fully aware of the same. It is important to clarify the detail for taking a personal loan when you approach a lender for the same. Doing this will instill confidence in them.
Ignoring the importance of credit history
Lenders asses your eligibility based on your credit history. They check how you have managed your finances in the past. If borrowers have a proven track record in maintaining financial responsibility, they are likely to have a good credit score. A good credit score plays a vital role in determining your eligibility for a loan and the interest rate thereon: if your credit score is low, chances of your application getting rejected are high. Any rejection will bring your credit score further down. Hence, you must check your CIBIL score before applying for a loan.
Hiding details of an existing loan
It is imperative that you should inform your lender about your existing financial transactions and liabilities. You must be honest about your financial status because concealing such information from lending companies will only make it difficult for you to avail of a loan. Lenders will, in any case, find out the information about your credit history. Hiding information or forging documents will lead to rejection of loan application.
Signing blank documents or form
Once we start the loan application process and meet the bank’s representative, we become lazy. For example, the executive comes to our doorstep to collect the required documents and get the form signed. Because of this, we sometimes sign blank documents or application forms and leave it to the executive to fill in the details. Avoid making this mistake! By filling the form yourself, you will understand what is required from you and it will save you from potential scam. You should get involved in every step of the loan process.
Ignoring the fine prints
When applying for loan most people don’t read the fine print under the impression that it does not contain important information. This fine print, generally, contains the fees and charges which borrower needs to pay in certain conditions. Skipping this step may land you in trouble later. For example, if you have applied for Rs. 5,00,000 loan, you will get Rs. 4,90,000 to your account. Hence, it is better to find out the processing fees in advance. Other than processing, there are other charges involved as well i.e. prepayment charge, late payment charge, etc. Also, don’t shy away from asking your lender to explain other confusing terms and conditions. It is better to clear your doubts before you sign rather than regret later.
A best personal loan application without any mistakes and discrepancies will lead to faster and hassle-free approval. For more information about the personal loan, you can go over to personal loan in India page on Afinoz.com.
What is Afinoz?
Afinoz.com is India's foremost online financial marketplace for availing loans and investments. Our main objective is to make the process of getting a loan or making an investment safer, convenient and hassle-free for individuals. We work with public and private banks, NBFCs and mutual fund houses across the entire country and offer an unbiased quotation on financial products. You can contact our team to get more information or apply for a loan or investment by calling on 0120-411-0376 or by emailing at email@example.com. Afinoz.com provides solutions which are quick, reliable, transparent, confidential and above all free.
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