How To Apply for a Personal Loan Smartly and Smoothly: 9 Key Tips

Urgent financial requirements can arise without warning and disrupt your budget. Thankfully, there are many personal loan apps that make it easy for you to arrange funds when needed. They aim to make your borrowing experience quick, convenient and stress-free.

Since getting a loan affects your current and future financial health, you must be smart and cautious about borrowing. Here are 9 things to keep in mind when applying for a personal loan on a mobile loan application.

1. Check Eligibility Parameters

When applying, the first thing you should check is the eligibility criteria set by the financial institution. This is a set of requirements that you must meet to get the loan at affordable terms. In case you don't meet these requirements, you may be rejected or may have to pay higher interest. 

Therefore, it is important to verify if you are eligible to avoid wasting time. Moreover, once rejected, your credit score drops, which can make it difficult to reapply. You can find all the relevant information on the app or the official website of the lender. In some cases, you can use an eligibility calculator to check if you qualify for the loan and even get an estimate of the amount. 

2. See the App’s Interface

Most lenders nowadays allow you to apply for a personal loan online or offline. The offline method is suitable if you want answers to questions from the lender’s executives face-to-face to make an informed decision. However, if you want swift approval and minimum hassle, the offline method is a simple solution. 

Even when applying on the lender’s app, you should choose the one with the most user-friendly interface. This is because the same app that you use to apply for a loan can help you track and monitor your loan’s progress as you repay it over the tenure. Ensure it gives you access to all the information you need, sends your reminders on the EMI due date and connects you to the customer service team hassle-free. 

3. Read The Fine Print

This goes without saying, but whenever you are borrowing money from any financial institution, make sure to review all the terms carefully. Sometimes, repayment may come with some conditions or additional charges.

By being aware of them in advance, you can eliminate nasty surprises and can focus on repaying as cost-effectively as possible. Some things to check are the processing fees, verification charges, part-prepayment charges, foreclosure charges, and interest rates. 

4. Plan Your Repayment Beforehand 

Another way to ensure a hassle-free loan experience is to calculate your EMI before accepting the offer. Whenever you apply for a loan, lenders give you an estimated amount based on your current repayment capacity. 

If you think you can afford to pay that amount every month, then you can accept the offer. Otherwise, you must change the loan terms for a lower EMI. If you have a good credit score, you can use this power to negotiate with the lender for more suitable terms. 

5. Compare The Cost of Borrowing 

Another important thing to do before accepting the offer is to compare it with what other lenders are offering. This means comparing the interest rates and other terms, like the tenure. 

You should also check other fees and charges and choose a loan app that is most budget-friendly. This helps you avoid paying more than necessary and reduces the risk of default.

6. Don't Fall for Gimmicks 

When exploring lenders online, you will come across many digital lending apps and websites that may promise the lowest interest rate. However, upon closer inspection, you will realise that these rates are higher than advertised. In short, make sure to verify all the details and don't rush into applying.

7. Borrow Only What You Need 

Since you have to pay interest on every rupee you borrow, it's best to choose the loan amount that you require at the time. For this, analyse your financial requirements and repayment capacity before applying. If you need additional funds, you can always opt for a top-up or get another loan.

8. Keep The Documents Ready 

This is a very straightforward tip to avoid any delays. As soon as you apply, you need to submit the documents to complete the KYC process. Thus, it's best to be prepared by checking the list of required documents on the lender's website or app. They usually include your ID proof, address proof and income documents. 

9. Assessing Your Credit Score Is Important

Last but not least, you need a good score. This is important as most lenders run a credit check to ensure you are a responsible borrower. If they find your score to be below the required level, you may not get approval. Even if you do, you may either get a low loan amount or a high interest rate. Since this score changes with every action you take regarding your use of credit, it's best to check it periodically to maintain good eligibility. 

In case you have not checked your credit score in a long time, you may not be aware of a drop in your score. If you have a score below 700, then your chances of getting an instant loan may have gone down. To keep up to date with your credit score all the time, choose the OneScore App. 

This mobile application gives you complete control over your credit health. Using it, you can get lifetime-free credit reports without a membership fee and without spam and ads. What's more, there is no restriction on how many times you can check your score. 

With its Score Planner feature, you can get customised advice on building a positive credit history and increasing your score periodically. What’s more, OneScore offers instant loans up to ₹5 lakhs based on your eligibility with no documentation. So, download the app to both boost your eligibility and apply for an instant loan!