Getting a loan for the first time can be a bit daunting, as there are many factors to take into account, such as eligibility, interest rates, credit duration, documents required for loan processing and many other things.
There are different types of loans available to suit various needs of borrowers. These include personal loans, home loans, business loans, education loans, etc. Understanding the different types of loans will help you choose the most suitable one based on your needs.
For example, a personal loan is an unsecured loan offered to borrowers to meet their immediate or planned financial needs. It can be used for a variety of reasons, such as medical emergencies, travel expenses, home renovation or debt consolidation.
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Before taking a loan for the first time, it is important to understand the various stages and processes involved in a loan disbursement by any financial institution. In this write-up, Priyank Shah, Co-Founder & CEO of The Financialist, will explain the process step by step and provide you with useful tips to get your first loan with confidence.
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Here are 10 essential tips to help you navigate the loan process:
- Basic hygiene check:
Before signing any loan agreement, it is important to read the loan documents thoroughly to understand terms, interest rates, repayment schedules and any other fees, says Shah.
- Create and follow a budget:
Take the time to identify key expenses like household supplies, commuting, and utilities, Shah advises. Create a clear budget so you can avoid borrowing more than you need, he suggests. Sticking to this budget will ensure that both loans and repayments remain manageable, he adds.
- Stay disciplined with repayments:
“Set up automatic payments or reminders to ensure timely repayments. Choose loans with flexible terms to pay off debt faster, avoiding additional fees and penalties,” Shah suggests.
- Choosing the right lender:
One should carefully select the right lender to secure the best loan terms and do research and compare lenders based on interest rates,
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