A fresher or a job seeker could be in urgent financial need since emergencies, such as ill health or unplanned home repairs, etc, show up without warning. Under such unavoidable circumstances, you could get a personal loan since you may have yet to manage to build savings. If you are considering getting a personal loan, you must keep these critical factors in mind
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Purpose
Clearly understand your requirement and if you genuinely need a loan. Suppose the loan is for higher education, skills enhancement course, home repairs etc. You may also need a co-signer as a type of guarantor who could be one of your close relatives.
Amount Required
Consider all the expenses you could incur for the thing you are getting the loan. Also, keep in mind that you need to repay the entire amount with interest that could vary between 10%- 27%.
Loan Term
As they say, “The sooner, the better.” The same applies to loan repayment, too. Try and repay your loan ASAP as longer-term typically has lower EMI, but you pay higher interest on the total borrowed amount.
Processing Fees & Other Charges
Always enquire about the charges associated with any loan, as fees and other costs are usually added to your loan amount.
Foreclosure Option
Check with your lender about the terms and conditions for foreclosure. Carefully calculate the additional amount you may have to pay if you are in a position to become debt-free earlier than you had expected. It would help if you did this so that you don’t spend more than the actual loan amount as foreclosure charges.
Terms and Conditions
Last but not least, always read the fine print carefully to be completely aware of what you are getting into.
So, if you have just gained financial independence but need to get a loan for an emergency or any reason, bear these things in mind before submitting that application!
