Personal loans as a credit facility involve 4 key and undeniable benefits in the form of quick fund disbursal, zero restriction on end-usage of loan proceeds, minimum documentation, and the nature of being a collateral-free loan. Hence, undoubtedly, personal loans of top lenders like HDFC personal loan are one of the most preferred loan options and banks for those in need of funds.
However, to ensure strong financial health and boosting of approval chances when taking a personal loan, here is a 10 point checklist which one should follow:
Check your credit score
Over the past years, credit score has become a crucial parameter for lenders to assess applicant’s personal loan eligibility. Your credit score acts as a reflection of your creditworthiness and repayment history. Based on the information mentioned in the credit report, credit bureaus compute your credit score. Upon checking your credit score, you can take the required steps to improve it and then eventually apply for HDFC personal loan with an improved credit profile to ensure good chances of getting the application accepted along with fetching low HDFC Personal Loan Interest Rates.
Check the income eligibility of prospective lenders
The majority of lenders set minimum income criteria for loan applicants when evaluating their applications. Income is often the first filter that lenders put in when an applicant applies for HDFC personal loan. These criteria may also vary as per the applicant's location. For a person living in metro areas, the minimum income requirement might be more than that required for someone residing in rural or semi-urban areas. Those who do not meet this criterion usually face outright rejection, even without considering other eligibility factors, like credit score & EMI affordability. Given that this criterion tends to vary across lenders, prospective applicants can compare various lenders and their offers based on their monthly income and other eligibility criteria.
Check the offers of your existing banks
Many personal loan lenders nowadays offer pre-approved personal loans at preferential HDFC Personal Loan Interest Rates to their existing and/or even highly prospective customers. The presence of existing relationships in varying forms like current, savings, salary or fixed/recurring deposit accounts, or existing loans or credit cards, can thus fetch you better deals on your loan or other credit requirements. Hence, those looking for HDFC personal loan should first start their process of finalizing the lender by contacting the HDFC bank and/or other banks and NBFCs with whom they share existing banking and/or lending relationship. HDFC Personal Loan Interest Rates and other loan features can then be used as a benchmark to compare the rates and offers of other lenders.
Review your credit report
Developing the habit of reviewing your credit report at regular intervals, ideally at least once every three months, is equally important. This will allow you sufficient time to make corrective efforts, if required, to improve your credit score before you finalize the decision to apply for HDFC personal loan. How this helps is it allows you to notice and get rectification for any incorrect information which has been adversely impacting your credit score. Upon quickly contacting the bureau and/or lender for such corrections, in return, you get a rectified credit report, which will reflect an increase in your credit score. Also, remember to compare the rates of lenders offering you a personal loan with those of HDFC Personal Loan Interest Rates, and then go ahead with the lender offering the best deal as per your requirement.
Select repayment tenure wisely
When availing of an HDFC Personal Loan, remember that most lenders factor in applicant’s repayment capacity while evaluating their loan applications. The requirement in terms of eligibility here is that the applicant’s monthly EMI obligations (including new EMI) should be as per the eligibility set by different lenders. Therefore, applicants should ensure to choose the personal loan tenure that keeps their monthly repayment obligations within the stipulated range. Keep in mind that applicants already having higher repayment obligations can have lower chances of getting their personal loan application approved with favourable service terms.
Ensure you are in the age bracket set in eligibility criterion
Another aspect often ignored by people when planning for HDFC Personal Loan is their current age and whether it fits the criterion set by prospective lenders. Not only the current age, but lenders may also factor in the applicant’s expected age at the end of loan tenure while assessing personal loan eligibility. Applicants who fail to qualify into the minimum and maximum age bracket are usually denied a loan.
Compare offers and features of as many lenders as possible
With many lenders like HDFC Personal Loan offering a wide range of offers and products pertaining to personal loans, their interest rates tend to a wide range, making it imperative for prospective borrowers to compare the personal loans offered by as many lenders as possible before selecting any. Hence, start your loan search by contacting the fintech, bank, and/or NBFCs with whom they have existing consumer relationships for their personal loan features. Do not restrict your lender comparison to just the rates of top lenders like HDFC Personal Loan Interest rates, but factor in other features, including repayment tenure, processing fees, loan amount, etc.
Paying attention to alternative loan options
When planning to avail HDFC Personal Loan to fulfil financial shortfalls, it's crucial to take into consideration other possible loan options as well, like a gold loan, top-up home loan, etc. Just like personal loans, these credit facilities do not involve any end-usage restrictions. Even when comparing with HDFC Personal Loan Interest rates, some of these alternative credit options of HDFC Bank and other lenders usually involve relatively lower interest rates and also longer repayment tenure. Hence, to ensure to avail the most suitable loan option as per fund requirement and repayment capacity, it becomes imperative to compare various available and feasible loan options before zeroing in on any.
Never borrow more than the required amount
Another step that can turn into a grave financial blunder is borrowing more than the actual requirement of funds. This is true especially for those having higher repayment capacity, as they are the ones who get tempted to avail a bigger amount of loan upon knowing their high loan eligibility. These people tend to forget that availing loans, especially relatively costlier ones like personal loans, involve interest cost just like the one levied in the form of HDFC Personal loan interest rates, which needs to be paid back with the principal borrowed. The higher amount you borrow, especially after the actual requirements, the more additional interest cost you incur, thereby taking away a higher amount of money from your pocket. Over-borrowing can even push you towards straining your financial health to repay the borrowed loan, thus causing a possible threat of increasing the risk of default. Hence, when taking HDFC Personal Loan, ensure to borrow only the amount you require and would be able to repay comfortably.
Avoid taking personal loans for unnecessary or avoidable expenses
The unsecured nature of HDFC Personal Loan often results in the involvement of a bit of high-interest rates levied by lenders to make up for the credit risk involved. Thus, even though applicants have no restriction on end usage of loan proceeds from personal loan disbursal, but it's wise to not unnecessarily avail the personal loan and incur such a high-interest cost. Only go ahead and avail the loan for necessary and unavoidable expenses like unforeseen exigencies or to meet financial shortfalls. Always remember you have to repay both the loan amount's principal and the incurred high-interest cost when availing of a personal loan. Go ahead with the decision to apply for a personal loan only after factoring in the involved HDFC Personal Loan interest rates and your repayment capacity along with other crucial eligibility criteria and your existing financial health.
