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If you are short of money, a personal loan is considered to be the easiest and fastest way. Nowadays, online process and instant loan apps have made it even simpler. But there are many dangers hidden behind the easy process. A little carelessness can put a heavy burden on your pocket and your credit score can also be spoiled. Therefore, it is very important to have the right information before taking a loan. Here we are telling you those 5 important things which are very important to pay attention to.

The greed of giving money without paperwork and instantly can trap you. Many instant loan apps charge 40–50% annual interest and add hidden charges. RBI has also warned against such unregistered apps. Always take a loan from a bank or NBFC approved by RBI.

Often people take more loan than needed. But when the income decreases or any financial problem arises, the burden of EMI increases. Therefore, if 10 thousand is enough, then there is no point in taking 20 thousand. Remember that the lesser the loan, the lesser the interest and the lesser the stress.

Missing the loan EMI date attracts a penalty and the interest may also increase. Therefore, set auto-deduction or put a reminder. Keeping track of the payment date keeps your CIBIL score strong.

Many banks and NBFCs in the market offer personal loans. Compare interest rates and choose the lowest interest rate. Try to have a short loan tenure so that the total interest paid is less. Loans with shorter tenure are cheaper in the long run.

Not paying EMI on time can cause your CIBIL score to fall. A falling score means that it will be difficult to get a home loan, car loan or a new personal loan in the future. Maintain the score at 750+ by making timely payments.