Navigating a loan process requires meticulous planning, an in-depth understanding of how it works, and knowing crucial don’ts to make borrowing seamless and productive. When you’re new to credit, it becomes even more important. It helps not only boost your approval chances but also helps in smooth & hassle-free loan closure, building a strong credit profile.
In case of negligence, the same productive loan can degrade your financial profile, causing long-term consequences. Don’t stress out! We’ve outlined a list of common yet prominent dos and don’ts here to make you fully aware before you apply for a personal loan for first time borrower. Let’s get started.
Having a clear estimate of your needs beforehand is crucial. It prevents you from over- or underborrowing. Remember, borrowing more than required means a higher interest rate, EMIs, and bigger financial commitments. Thus, obtain an amount that truly fulfills your purpose, not what you’re eligible for.
Important Tips:
Note down your expenses on paper to develop a clear understanding of how much is sufficient.
It must be remembered that your EMI shouldn’t be more than 30-40% of your monthly salary. Otherwise, you’ll be forced to skip your monthly obligations, crucial expenses, and sometimes your EMI too. Missing EMIs or lump sum repayment leads to a slump in the CIBIL score, affecting your credit profile poorly.
Important Tips:
Use the EMI calculator to strategically plan your EMIs or lump sum repayment. To make things easier, banks, personal loan apps, or a credible lending platform facilitate users with a digital EMI calculator on their apps and websites.
Not just newbie applicants, but also seasoned borrowers make a dire mistake of not reading and understanding the terms and conditions of a personal loan. As a result, they remain ill-informed and are often met with surprises, shocks & stress. Having a clear understanding of hidden charges, foreclosure rules, processing fees, and penalties will help prevent financial regret later.
Important Tips:
You can seek help from customer support to develop a clear understanding of the ifs and buts of a loan. Credible instant loan apps, such as SalaryOnTime, provide round-the-clock assistance to borrowers throughout the application process to ensure seamless service.
Because every loan application trigger hard credit enquiry, applying to multiple lenders can lessen your credit score. To boost your chances of getting a personal loan for first time borrower, you should be selective. Instead of applying to multiple lenders, choose a platform where you can easily fulfill the eligibility requirements.
Important Tips:
Choose RBI-registered loan apps in India for secure and customer-centric eligibility.
You must understand the difference between a need and a want. For example, a personal loan for first time borrower can prove to be meaningful in critical scenarios, such as an unforeseen medical emergency, a sudden relocation, an out-of-nowhere vehicle breakdown, education, debt consolidation, etc. Conversely, taking such a loan for unnecessary, luxury, or impulsive expenses can backfire with a debt trap.
Important Tips:
Don’t borrow just because a loan is available. Borrow for genuine reasons.
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