If you don’t know anything related to personal loan now is the right time to think about financial independence and how to use personal loan to take advantage. A personal loan is a flexible loan that can help you meet various financial needs, such as home renovation, medical expenses, education costs, or even a dream vacation. The best part is most of the personal loans are quick disbursement, relatively easy application compared to other loans and also you have the option to apply online either through the website of the lender or the application but it depends on the lender that if they provide online service or not. Let’s optimize the personal loan for maximum benefit in Here’s a quick overview of the personal loan:
| Interest Rate | Income | Age | Documents Required | Loan Tenure | Processing Fee |
|---|---|---|---|---|---|
| 10.50% Onwards | Minimum ₹20,000/month | 21 - 60 years | ID proof, Address proof, Income proof, Bank statements | Up to 7 years | Up to 6% of loan amount |
Before applying for a personal loan, carefully assess and ask yourself “how much do I need?”. Borrow only what is necessary to keep repayments manageable and reduce interest costs.
Example: Suppose you need ₹2,00,000 for a home renovation. Borrowing exactly this amount instead of ₹2,50,000 will save you money on interest and help you stay within your budget.
It’s a difficult task to choose the right lender as different lenders offer varying interest rates, processing fees, and loan terms. Research and compare offers from multiple lenders to find the one that best suits your needs. Click here to compare and apply to the best lenders for personal loans.
Your credit score affects the interest rate you get. A higher credit score (750 or above) can help you negotiate better rates with lenders.
Here is what does it score tell about:
| Credit Score | Review |
|---|---|
| 420 | Poor category (Very difficult to get a loan) |
| 630 | Fair Category |
| 690 | Good Category |
| 770+ | Very good Category |
Longer loan terms might lower your monthly EMI payments, making them more affordable each month. However, they can also lead to paying more in total interest over the life of the loan. To save on interest costs, choose the shortest loan term you can comfortably manage. This way, you'll pay off the loan faster and pay less in interest overall.
Example: A ₹5 lakh loan at 14% interest for 3 years will cost less in interest compared to a 5-year tenure, even though the EMIs will be higher.
Prepayment is when you pay off part or all of your loan before it’s due. It can help reduce your total interest costs. Many lenders allow prepayment of personal loans, either partially or fully, most of the time with some prepayment penalties. Prepaying your loan can reduce the principal amount and save you interest.
Taking out several personal loans or any loans can be hard on your finances and hurt your credit score. It’s best to focus on handling one loan well before you consider taking out another. Make sure you manage your current loan responsibly to keep your finances and credit in good shape.
Personal loans can help you achieve important life goals, such as education, marriage, or travel, by providing the necessary financial support.
| Strategy | Description |
|---|---|
| Evaluate Your Needs | Poor category (Very difficult to get a loan) |
| Choose the Right Lender | Compare offers to find the best interest rates and terms. |
| Negotiate Interest Rates | Use your credit score to secure better rates. |
| Opt for Shorter Tenure | Save on interest by choosing the shortest tenure you can afford. |
| Use Prepayment Options | Prepay your loan to reduce interest costs. |
| Avoid Multiple Loans | Focus on managing one loan efficiently before taking another. |
| Invest in Asset Building | Use loans for education or business for long-term benefits. |
| Create an Emergency Fund | Use part of the loan to build a financial safety net. |
| Improve Your Living Space | Renovate your home for increased property value. |
| Consolidate Debt | Combine high-interest debts into one loan to save on interest. |
| Fund Life Goals | Use the loan to achieve important personal milestones. |
To get the most from your personal loan, plan carefully and make informed choices. Check your needs, pick the right lender, negotiate good terms, and use the loan wisely. This Independence Day, take control of your financial future by using personal loans to build a strong foundation for long-term success and independence.
How can EazyBankLoan help you in taking a loan? We understand the process of procuring a loan can be stressful. That is why we take care of your Loan application process, saving you time and hassle by handling the paperwork and communication with the loan providers.
Check the details here at EazyBankLoan
Need help? Reach out at support@eazybankloan.com
A credit score above 750 is considered ideal for securing a personal loan at competitive interest rates.
Yes, you can prepayment the personal loans, but there will be some prepayment charges.
Choose a tenure that balances affordable EMIs with minimal interest costs. Opt for the shortest tenure you can manage comfortably.
Invest in education, skill development, or starting a business to use your loan for long-term asset building and financial growth.
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