Common Mistakes to Avoid When Taking a Personal Loan
- Borrowing without assessing your actual need - Taking more than required increases EMIs and repayment burden. Always evaluate your financial requirement before deciding the amount.
- Not comparing interest rates - Accepting the first offer without research can raise the total borrowing cost. Compare lenders and choose the most suitable rate.
- Ignoring extra charges - Processing fees, late penalties, or prepayment costs can add up. Factor in all additional charges before applying.
- Skipping eligibility checks - Applying without meeting lender criteria may lead to rejection and impact your credit profile. Review requirements beforehand.
- Avoiding EMI calculation - Not estimating monthly repayments can strain your finances. Use an EMI calculator to confirm affordability.
- Overlooking terms and conditions - The fine print contains repayment rules, penalties, and obligations. Read agreements carefully before signing.
- Submitting multiple applications at once - Applying with several lenders simultaneously may harm your credit standing. Apply selectively and strategically.
- Neglecting credit score health - A weak score may lead to rejection or higher interest. Check and improve your credit profile before applying.
- Delaying repayments - Missing or postponing instalments results in penalties and damages creditworthiness. Maintain disciplined repayment habits.
- Failing to track application status - Not monitoring progress can delay disbursal or resolution of issues. Stay updated throughout the process.
Disclaimer:
This content is intended for general informational purposes only and should not be considered financial advice. Loan terms, eligibility, and charges vary by lender. Always consult directly with financial institutions or qualified advisors before making borrowing decisions.
