Personal loans are unsecured loans that do not require you to pledge any collateral as security. You can use them to consolidate multiple debts, renovate your home, or pay for medical expenses. There is no restriction on its end use, which makes it more appealing. However, before you obtain a personal loan online, it is a good idea to have all the pertinent information.
Interest rates on a personal loan can vary for different lenders. Therefore, it is a wise choice to compare personal loan rates of leading banks or financial institutions before you select one. To obtain additional tips on how to avail personal loans, you can read all about it here.
Another critical factor to consider is the credit inquiries you make. When you fill a personal loan application with multiple lenders, they review your credit report and a hard inquiry is noted on your statement. This can negatively affect your credit score by five to ten points. These hard inquiries can remain on your credit report for two years before their impact diminishes. Therefore, it is best to avoid making multiple loan applications simultaneously to prevent your credit score from plummeting.
Let’s look at some primary concerns of most borrowers
Is it a wise choice to obtain a personal loan?
Personal loans can be a viable option to meet any personal financial obligations. However, it is essential to consider your needs before you apply for a loan. Analyse your purpose of the loan and determine the amount you may need after assessing all associated costs.
Will obtaining a personal loan hurt my credit score?
Taking a personal loan can help your credit score. A personal loan can be a boon for people with substantial debts including credit card debt, which comes with significant interest rates. A low-interest rate personal loan can consolidate your higher-interest-rate debts, reduce your monthly outflow, and help you save in the long run. In addition, a personal loan adds variety to your credit type. Lenders and creditors tend to view this as a welcome sign while reviewing your credit history.
What is considered a good credit score to get a personal loan?
A CIBIL score is a number assigned to an individual and it represents his/her creditworthiness. In general, the credit score ranges from 300 to 900. A CIBIL score of 750 and above is considered a good score to apply for a personal loan. It means that the applicant is creditworthy and their application can be processed without hassles. The higher your score, the better chance you have of obtaining a personal loan at favorable terms and conditions.
However, some lenders offer loans to individuals with low CIBIL scores as well. But it is a good idea to improve one’s CIBIL score before applying for a loan.
Conclusion
Personal loans online can take care of most large expenses. It can help to understand the terms and conditions of the loan agreement in detail and the various fees, penalties, and charges applicable before you sign on the dotted line.
Bajaj Finserv offers low-interest-rate personal loans with minimal documentation and quick disbursal. If you meet personal loan eligibility requirements, you can get instant loan approvals. Additionally, you can receive the money in your bank account within twenty-four hours.
Bajaj Finserv brings you pre-approved offers for home loans, business loans, personal loans and a host of other financial products. This can simplify the loan processing and also help you save on time. You can share some basic information and check out your pre-approved offer.