Top Mistakes to Avoid When Taking a Loan

But before that, check out the online EMI calculator and then ask yourself honestly - Is everything okay after paying this EMI?

Mistake #4: Prioritizing Speed over Safety

Yes, I know. The phrase “personal loans fast approval” makes one feel like he has reached heaven but the very act of rushing is what leads to unforeseen charges and high interest rates.

A “quick approval loan” is acceptable provided the lending entity is legitimate and terms and conditions are transparent. Make sure they have an RBI registration and don’t pay advance fees for getting approved for the loan - this is one of the common scams.

Quick read: Instant Personal Loan: How to Get One at a Low Interest Rate

Mistake #5: Ignoring the Fine Print

Dull, right? Definitely! Yet, necessary!

Take a look at any prepayment penalties, late payment fees and foreclosure clauses. If there is some confusion - ask; a legitimate lending company will be happy to clarify anything.

Mistake #6: Applying Simultaneously Everywhere

Each and every time you apply for a loan, the lender reviews your credit report. Too many checks within a short period of time reduce the credit score. Instead, use the eligibility checkers first.

Mistake 7: Borrowing More Than You Need

Just because you have been pre-approved for ₹5 lakhs does not mean that you need to get this amount. You should get only that much money that you require. More money feels good now but is going to hurt you in the future.