Get the Tata Capital App to apply for Loans & manage your account. Download Now

Blogs

SUPPORT

Menu  
 
Apply Now
Apply Now

Tata Capital > Blog > Rules to Follow When Taking a Personal Loan

Personal Use Loan

Rules to Follow When Taking a Personal Loan

Rules to Follow When Taking a Personal Loan

The demand for personal loans has grown at a scorching pace in India. Primarily because these loans do not mandate any collateral, can be availed online, and have flexible repayment tenures. Whatever the reason may be, if you are looking for a convenient finance option for any end-purpose, personal financing is the way to go.

However, even though this finance option is convenient to avail, there are a few personal loan rules you must keep in mind while borrowing one. These include:

Maintain a healthy credit score

Since personal finance is typically unsecured, meaning you can avail of it without pledging a guarantee or collateral, you must maintain a good CIBIL score.

Your CIBIL rating is a measure of your creditworthiness for the lender as it helps them assess your chances to repay the loan on time. The CIBIL rating scale ranges from 300 to 900, and the higher you go, the better are your chances of getting a loan at competitive personal loan interest rates. Most lenders favour borrowers with a credit score of 700 or above.

A score lower than 700 will also get you personal finance but at a slightly higher rate of interest. To maintain a healthy credit score, ensure that you pay your credit card bills and ongoing loan EMIs on time.

Additional Read: Tips to Improve Personal Loan Credit Score

Check for foreclosure or prepayment charges

After availing of personal finance at fixed EMIs, a time may come when you have enough money to pay off your entire loan well before the tenure is over. This is called prepayment and is done to reduce the total interest outgo on loan. And once you prepay your entire loan amount, the lender will provide you with a foreclosure letter.

Specific lenders also charge a high fee for prepaying or foreclosing your loan. You can check the exact foreclosure charge in your loan document. Make sure to go through these additional costs carefully. If you can’t find them in fine print, ask your lender separately. In any case, best to go with a lender who charges a nominal or no prepayment fee.

Enquire about hidden charges, if any

The prepayment fee is not the only charge mentioned in the loan papers. There may be several others, such as processing fee, default penalty, etc. Therefore, before taking a personal loan, be aware of any hidden charges and budget for them while applying.

Additional Read: Tips to Save Money through Personal Loans

In conclusion

Here are two tips for you before we sign off! If you ensure a good CIBIL score, your personal loan eligibility will automatically be high and approval swifter. Secondly, make sure you take a day or two reading the entire loan contract before signing below the line.

Are you looking for personal loan? If yes, then turn to one of India’s most trusted lending institutions – Tata Capital. We offer a loan for individual use at affordable interest rates, flexible repayment tenure and minimal paperwork.

And if you want to figure out your monthly EMIs with us before applying, log on to our website and use our personal loan EMI calculator to assess affordability.

For more information on personal finance at Tata Capital, visit our website today!

Apply Now
Check EMI

Get an Instant Personal Loan for all your needs !

Apply now
Popular Searches
loan without cibil personal loan for 15000 salary Loan for ring small cash loan on aadhar card pre approved personal loan What To Buy On Dhanteras Personal loan when self employed how to increase cibil score form 15g for pf withdrawal how to download aadhar card
More About Loans
personal loan personal loan eligibility personal loan interest rate pre approved personal loan overdraft loan small loans flexible personal loans personal loan documents personal loan procedure personal loan emi calculator prepayment of personal loan
Disclaimer

Most Viewed Blogs

Trending Blogs

Calculator

Personal Loan EMI Calculator

Personal Loan EMI Calculator
Home Loan EMI Calculator

Home Loan EMI Calculator
Business Loan EMI Calculator

Business Loan EMI Calculator
Used Car Loan EMI Calculator

Used Car Loan EMI Calculator
Two Wheeler Loan EMI Calculator

Two Wheeler Loan EMI Calculator
Loan Against Securities Calculator

Loan Against Securities Calculator
Loan Against Property Calculator

Loan Against Property Calculator
More Tools