There are many reasons why you may be thinking about getting a personal loan. Maybe you have a credit card and the debt is close to 20%, you’ve had your hours cut back at work, you’re buying a house, or you had an unexpected expense come up that you had to suddenly pay for.
A personal loan can also be known as an unsecured loan, and it can help consolidate debt or fund a large expense. The key reason why many people take a personal loan is because unlike a mortgage or student loan, the reasons why you’re choosing to take the loan can be kept personal.
The interest rate that you get with your personal loan will be dependent on a number of different factors. Because they’re unsecured and banks don’t ask for collateral or want reasons why you’re getting the loan, personal loans tend to have slightly higher interest rates which can be different depending on the bank you look at.
One of these factors is your net income, since this shows the amount you earn and your “chances” of paying it back. The organisation that employees you is also important, and organisations that are “known” to the bank may be looked upon more favourably (such as working for the government or a well-known company.
A huge factor is your credit history. If you have a good credit history and you pay your debts back on time and within their terms, you’re seen as less of a risk by the bank or lender, and therefore are likely to have a lower interest rate on your personal loan.
The relationship that you have with your bank is also important. If you’re a new customer, they’re unlikely to have the same amount of trust that they would if you’ve been a customer for years. And if you have been a member of the bank for a long time, they’ll want to see that you’ve been a good customer and have made any repayments on other loans and credit cards on time. If you’re looking for an excellent financial choice, consider taking your personal loan from IndusInd Bank.
And if you’ve gotten yourself into a bit of a financial mess, and you’re disappointed in yourself for needing a personal loan, keep your head up. You can still turn your finances around, and should think of a personal loan as a helping hand, allowing you to keep your head above water and make a new plan for your finances.
Budgeting is super important, so consider how you’ll pay your loan back, and how you can get the most out of it. Good luck!