# **Personal Loan Availing Tips One Must Follow**

A personal loan is a form of unsecured loan, whose funds can be used to meet a wide variety of expenses. Interested borrowers must do their research and compare multiple loan options to find a loan offer that can effectively meet their financial needs.

Personal loans have become a widely popular financial tool today that helps individuals meet their financial goals. Starting from consolidating debt or paying for home renovation to buying a car or organising a wedding, there are many reasons why one may apply for an [instant personal loan](https://www.muthootfinance.com/personal-loan). These loans provide people quick access to funds with minimal paperwork, and are generally disbursed within a day or two. While personal loans do have many benefits, people availing such loans must follow a few key tips.


## Personal Loan Tips

● Research Thoroughly Before Applying: There are several banks and NBFCs in India that offer personal loans today. Many of these lenders make bold claims, and it can be easy for first-time borrowers to get carried away and apply for the very first loan offer they come across, without carefully reading the terms and conditions. But doing so can be a huge mistake. One must always do thorough research before availing a personal loan. It is crucial to select a reputable and reliable lender whose loan offer aligns with one’s financial requirements.

● Look for The Lowest Interest Rate: One must compare [personal loan interest rates](https://www.muthootfinance.com/personal-loan/interest-rate) offered by multiple lenders, and zero in on the most affordable options. Even a small difference in the interest rate can have a significant impact on the overall cost of the loan. After all, the interest rates have a direct impact on the loan EMI amount.

● Check Eligibility Criteria: Prior to applying for a personal loan, one must check whether they meet the lender’s eligibility criteria or not. There are many factors that are assessed to determine eligibility for personal loans, including the income and credit score of the borrower. These factors indicate the repayment capacity of the borrower.

● Maintain High Credit Score: To increase the odds of having their personal loan application approved, one must try their best to maintain a high credit score. A high credit score would boost one’s chances of obtaining the desired personal loan amount with a budget-friendly interest rate. Lenders consider credit scores to be an indication of the creditworthiness of the borrower. There are a few simple steps one may follow to improve their credit scores, like paying credit card bills and any other pending debts on time.

● Choose A Shorter the Loan Tenure: It is often tempting to choose a longer repayment tenure than necessary, as it results in a lower EMI amount. However, one must understand that a longer repayment tenure would also result in higher interest payments on the whole. Hence, it is better to select a shorter tenure, as long as the EMIs are affordable for the borrower.
After one obtains a personal loan, they must also be mindful of paying its EMIs diligently and without fail for the chosen tenure. Timely EMI payments would make sure that one does not incur any unwanted penalties. Timely payments also help in improving one’s credit score and history. A good credit score would be useful in availing any future loans at better rates and favourable terms.