Do you want to get an unsecured loan without the hassle of collateral or any investment from your side? In this article, learn the tips and tricks to get these loans to meet your financial obligations.
Evaluate your needs
Before you take a Personal Loan, evaluate the needs you want to fulfil with the loan amount. This assessment will help you take on the right amount and plan the EMIs accordingly. Once this is done, you can apply for your loan. There are loan calculators available online that can help you estimate the repayment terms and tenure of the loans you are looking to take. A salary loan calculator is also a useful tool for people who wish to check their loan EMIs and unsecured loan eligibility. This will help you plan out the repayment and so get the best deal out of the loan agreement.
Compare loans from different banks
There are many banks that offer different interest rates on Personal Loans. Before you choose the loan you want to take, do some research on the bank and their offers. After you look into the bank loan plans, choose the one with the lowest loan interest over a suitable period of time.
Some banks do not offer unsecured loans. Choose one that offers these loans on better terms and easy eligibility. This will help you get loans on convenient terms and at a faster pace. A lower interest rate, convenient terms and no need for collateral can be a great option for you.
Look at your credit score
Your credit score plays a major role in the determination of your eligibility for unsecured loans. When the bank gives you an unsecured loan, they are taking a chance on your repayment capacity. Since there is no collateral, there is no guarantee that you will repay the loan. However, if you possess a good credit score, it acts as your credit line, and you can take an unsecured loan. A good credit score shows that you are well prepared to pay back your loan.
A good credit score aka 750 and above score will help you get Personal Loans with ease. The better the credit score, the better terms and lower interest you get for the loans. A low credit score can mean a higher interest rate on a Personal Loan or become a reason why you don’t get your loan on time. For getting better unsecured loans, maintain your financial profile and credit score. If you already have existing loans, make sure you pay them back.
Compare the interest rates
Comparing the interest rates of different loan plans and choosing the lowest one is a good idea. However, when going for a lower interest, also check for other terms and conditions of the loan. The loan should not have additional terms and conditions that have hidden charges in it. Use the salary loan calculator and see how much interest is added to the principal amount you can pay back.
Usually, secured loans have lower interest rates than unsecured ones. This is because the bank is taking a higher risk with an unsecured loan. The interest rates of the unsecured loan matter when you are looking at the finances. When you do not have anything to put up as principal, an unsecured loan is a good idea. However, if the interest rate is too high, then the whole advantage of a collateral-free loan is defeated.
Read also: Avail Instant Loan Online With Low Interest Rates
Ask for the prepayment terms
Loan prepayment is a good way of saving money and taking a Personal Loan with a low-interest rate. The loan can be more easily repaid if it can be pre-paid to an extent. With prepayment, the principal amount goes down, and the interest charged on the loan amount also goes down. This makes repayment through lower EMI installments easier. Prepayment can have some charges added to the amount, but the charges are negligible as compared to the profit you will make in the long term.
Wait for six months before reapplying
If you apply for an unsecured loan and get rejected: wait for at least six months before reapplying for the same loan. The loan application might get rejected because of your poor credit score. Always try to check your credit report and check it twice before applying for a loan. If the credit score is bad, make sure you check for ways to improve the credit score and use them to make it better.
Once the credit score is improved over a time period, you can reapply for the loan, and the bank will accept your application for an unsecured loan. If the loan application is rejected and you try again and again over a short period of time, it can lead to further degradation of your credit score. Therefore, it is better not to go to other lenders or check for applications again and again.
Unsecured loans are advantageous when you want to get the best out of a loan and do not have collateral. If you are in urgent need of funds and there is no collateral, you can always go for unsecured personal loans. A personal loan has flexible eligibility criteria and can be used for the uncategorised expenses of the borrower. The loan is great, with low-interest rates and flexible repayment terms. However, before going for an unsecured loan, make sure you check your credit profile.