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Mistakes we do while applying for Personal Loan

Applying for personal loan? Make sure you are not making these mistakes

Personal loans are loans taken by people for meeting their cash requirements, generally unforeseen cash requirements. And it is generally sanctioned on the basis of past credit history. It is based on the person’s personal ability to repay loan. Most of these are unsecured loans, which means, they are provided without any security.

People make some common mistakes while applying for these personal loans, which unfortunately results in the rejection of the loan. So here are some tips you should follow and some common tips you should avoid so that you don’t face any problem.

Ask some questions

Before applying for loan make sure you are asking some questions form yourself:

  • Is this loan essential?
  • Is it urgent, or it can be postponed?
  • Are there any alternative available like borrowing it from someone in friend or family?

Calculate your repayment capacity and borrow as per it

People apply loan as per their needs, without calculating their repayment capacity, due to which sometimes they issue more than their repayment capacity. Therefore before borrowing any money calculate how much you can repay and what are your sources of income in future and don’t borrow more than your capacity.

Maintain your good past credit card records

Most of these loans are sanctioned without any security and the bankers go through your past credit card records to sanction your loan, most of these loans are granted on the basic of past record only. So it is very important to repay your credit card amount so that you don’t face any problem in future while taking any personal loan.

Try to avoid more than one individual loans

Sometimes, people try to divide their current cash requirement into small parts and then apply for these small amount loans from different-different lenders. By this you can fulfil your current requirement of cash but it will increase your liability and as well as difficult for you to manage as well as repay. It will may also result in your falling CIBIL score. So take only one personal loan at a time.

Read the documents before signing.

Although it is very obvious statement, still people make this mistake, they sign without reading the papers. In many personal loan cases the loan seeker has signed even blank documents.

People make some more common mistakes like not making proper market study like who is providing loan at which rate, or not selecting a proper banker. Maintain proper statements of your loan to avoid any confusion in future. These small things will make your work easier.

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