Everyone applies for a loan at least once in a lifetime. But before applying for a personal loan there are certain steps to be overlooked like, when a personal loan is important, calculating EMI, understanding interest rates, choosing the best personal loan, etc.
Personal loans are the loans provided on no collateral requirement that is the reason they are known as unsecured loans. Don’t apply for personal loans to
- Buy a car.
- Start a business.
- Purchase a house.
- For investments.
- To lend someone else.
There are respective loans provided to buy a car, house or for a business and are provided on taking a collateral into consideration.
As the name suggests a personal loan is for personal reasons. At most of the banks in UAE, stating the reason for the personal loan is not mandatory. It can be opted for
- To pay credit card dues
- To clear existing high interest loans
- For a wedding
- To go for a vacation
- To get home renovated
- To buy new furniture
- Higher studies
- To pay medical bills if the medical insurance doesn’t cover all the medical expenses
Plan before applying for a personal loan.
Proper planning is important before applying for a personal loan.
- Check each and every detail like type of interest rates, processing fees, prepayment charges, etc.
- Not all banks provide loans on the same charges.
- Getting a personal loan for unnecessary expenses can have a bad impact on the credit score.
- Check, Compare different loans, and Calculate the EMI before applying.
Amongst the different important steps, calculating your Equated Monthly Installment(EMI) is vital. It helps the borrower to plan the finances in a better way.