Mistakes you are Doing That Could Impact Your Personal Loan Application

Before taking credit, one is expected to know the amount one wants to borrow, prevailing interest rates in the market, financial proof, etc. However, in order to successfully pay out your credit, financial planning from the start is important.

Yes, financial planning is essential, even if you are planning to take a personal loan. After all, the credit you are taking from a financial institution needs to be returned at a particular date. If you default on it, you will end up paying penalty fees and don’t forget the accrued interest you need to pay at the end. Financial planning is one of the ways to manage your money so that you can decide how much to earn, invest, and spend. Had you not planned your money properly, you could end up in a debt trap, suffer from a low CIBIL score that will ruin your future chances of getting credit, won’t be able to save for anything in the future and what not. Below we have listed out few mistakes that all of us are guilty of doing that could hamper your future prospect of getting a personal loan application approved.

Not tracking minor expenses: It is easy to track regular expenses like gas, electricity, water, phone bill, etc. but what about minor or irregular expenses like watching a theatre or dining out? The latter expenses go untraced amidst the major expenses. Every other expense you make should be accounted for when analysing your expenses. It is because you might have taken a short-term EMI tenure which requires you to pay a huge chunk of your income towards paying off your EMI. At that time, you will get a bird’s eye view of those minor expenses and know which one to cut down for a short while.

Improper investment plan: Everyone is aware of the benefits of making investments. Not having an investment plan insight could make you go for a larger amount you could borrow for your personal needs. Having financial obligations in terms of paying a monthly premium, making SIP, or another investment ensures the amount you borrow is what you actually require. It will also help you figure out whether you should go for a long-tenure or short-tenure option. Failing to do so could have a real negative effect on your financial health.

No idea about your current financial standing: Are you one of those who puts a number of things in their cart and then buy everything at once without looking at the bank balance? So many people out there have either overestimated their account or don’t know the exact balance in their bank account. Knowing your financial standing is important before you go out to avail a personal loan for your needs. If needed, take the help of HDFC Personal loan customer care or your bank’s help in case you spot any discrepancy in your credit report. Poor financial planning will not only hamper your credit score but also ruin your chances of getting credit in the future.

The aforementioned are a few key mistakes that you must avoid in your life and shouldn’t go unnoticed, or else the effect might haunt you later. Customer care centres such as HDFC Personal loan customer care or the bank you are associated with will be able to help you in case you face any issue in getting your personal loan application approved. Once you have started tracking your expenses, making investments and knowing your financial standing, it is time to apply for a personal loan, but while doing so and using HDFC Personal loan EMI Calculator to know your monthly outgo, refrain from committing these mistakes: 

Do your homework: While availing personal loan, carefully read the terms and conditions, repayment options, and even rates and fees. These factors can all vary between the various Indian financial institutions. Hence, do take your time and compare them properly. Doing a little homework can actually go a long way in helping you save money. Instead of doing the legwork of calculating your monthly outgo, you can use the EMI calculator. For example, HDFC has their own HDFC Personal loan EMI Calculator, and likewise, many banks have too. For further questions, HDFC Personal loan customer care will be of great help.

Check your credit score before applying: If you want to ensure your personal loan application doesn’t get rejected, make sure you check your credit score from to time. If you see any error in your report, immediately connect with HDFC Personal loan customer care regarding the same. A low credit score can really dent your prospect of getting your loan application approved. Having a high credit score can help you fetch loans at a low-interest rate. Add your credit score while checking your monthly outgo through HDFC Personal loan EMI Calculator tool. In case the score is not above 750, you can improve it by cutting down unnecessary expenses, paying off your bills that are due, and not applying for new credit for some time.

Submitting direct applications to multiple lenders: Borrowers should understand that as soon as you submit a loan application directly to lenders, they initiate credit report requests from credit bureaus. This is done to evaluate your creditworthiness. For the unversed, these requests are called hard enquiries. Each of them gets listed in the enquiry section of your credit report. In case you submit multiple loan applications within a short span of time, this can significantly impact your credit score. What you can do instead is visit an online financial marketplace and compare different lenders. Though these marketplaces also fetch your credit report from the bureaus, they won’t be constituted as a hard inquiry but as soft ones which do not impact your credit score. You can also benefit from HDFC Personal loan EMI Calculator or other EMI calculator tools. Choose the lender on the basis of your current income, credit score, and other eligibility parameters.

There is an old adage that loosely goes like we all make mistakes, and that’s how we learn. However, with money, you don’t have to make mistakes to learn some lessons. Do your research, check your credit score often, connect with HDFC Personal loan customer care if needed, use an EMI calculator such as HDFC Personal loan EMI Calculator and ensure you have enough money or income source to pay for the repayments. These are a few of the ways through which you will be able to make your personal loan application process pain-free.