Here’s an expanded and easy-to-understand breakdown of the 7 Common Mistakes to Avoid When Taking a Personal Loan, tailored for your audience — especially salaried individuals and young professionals:
1️⃣ Not Checking Your Eligibility Before Applying
Mistake: Applying for multiple loans without checking if you’re eligible.
Impact: Multiple rejections can lower your credit score.
Fix: Use eligibility calculators or consult with a loan expert (like BHS Fund 💼) to find the right lender for your profile.
2️⃣ Ignoring the Interest Rate
Mistake: Only focusing on the loan amount and EMI, not the actual interest rate (APR).
Impact: You might end up paying way more over time.
Fix: Always compare interest rates across banks/NBFCs and calculate the total cost of borrowing.
3️⃣ Borrowing More Than You Need
Mistake: Taking a bigger loan “just in case.”
Impact: You’ll pay unnecessary interest on money you don’t use.
Fix: Borrow only what’s needed. Plan your expenses smartly — whether it’s for a wedding, education, or emergency.
4️⃣ Not Understanding the Terms and Conditions
Mistake: Skipping the fine print.
Impact: Surprise charges, foreclosure penalties, and EMI bounce charges.
Fix: Always read or ask your loan agent to explain processing fees, prepayment terms, and late payment rules.
5️⃣ Choosing the Wrong Loan Tenure
Mistake: Picking a short tenure for low interest or a long tenure for smaller EMIs without considering financial goals.
Impact: May strain your monthly budget or increase total repayment.
Fix: Choose tenure based on your monthly cash flow and repayment capacity.
6️⃣ Applying with a Poor Credit Score
Mistake: Applying for a loan without knowing your CIBIL score.
Impact: May lead to rejection or high-interest offers.
Fix: Check and improve your credit score before applying. BHS Fund can guide you with credit improvement tips.
7️⃣ Not Comparing Lenders or Offers
Mistake: Going with the first offer you get.
Impact: You may miss out on better rates, 0% processing fee, or faster disbursal options.
Fix: Compare lenders through a trusted agency like BHS Fund that ties up with multiple banks and NBFCs.
