Although India celebrates festivals throughout the year, the Indian festival season begins in August/September and ends with the New Year celebrations in December. Many people also plan larger purchases such as a house or other expensive consumer goods during this time, as they are considered cheap. In addition, brands are extending discounts this season. Lending institutions generally see increased demand for credit during the festival season.
A loan is a liability. If you apply for a loan, you must ensure that it is paid on time so that your creditworthiness is not affected. If you borrow and pay responsibly, now might be a good time to improve your credit score.
Here are five things to consider before you qualify for the festival season credit.
Work with a budget
With the holidays and celebrations all around you, it’s easy to get carried away and spend more than you can afford. Therefore, it is important to create a budget for all the expenses you anticipate during the season. Even if you’re considering borrowing for a purchase, it’s important to think about the maximum loan amount your finances can afford. Be responsible with your expenses while enjoying the celebrations.
Regularly check your solvency
If you’re considering making a credit-based purchase during the festival season, it’s a good idea to work early on to improve or maintain a good credit history that can be checked right away. Lenders will check your credit history and creditworthiness before approving a loan. In general, most lenders consider a credit score of 750+ to be good. If your score is low, you can work on it by paying down debt and avoiding delinquency. You should avoid applying for multiple loans in a short period of time, as this can negatively affect your score.
Choose credit options wisely
If you’re considering buying an expensive TV, it might be better to opt for permanent consumer credit than to swipe your credit card or take out a personal loan. Evaluate all the credit options available for your purchase and compare features and interest rates to find the best credit. Also, be sure to check your credit history before applying for a loan, as this will give you a clear picture of your credit profile and help you decide on the most suitable loans and programs.
Read the loan conditions carefully
During the festival season, many banks and financial institutions advertise special loan offers to attract more customers. Before subscribing to such an offer, be sure to read the Terms and Conditions carefully. There have been many cases where people have skipped the fine print and ended up paying more than they represented. Therefore, please review all documents carefully and obtain a full understanding of the offer/loan before signing the dotted line.
Never miss your EMIs
You may decide to take out a loan to buy a product. It’s important to remember that even if you’re happy with your purchase, you’ll still have to pay for it in equal-value (EMI) installments over the next few months or years. Otherwise, your credit score may go down. This will make it difficult to obtain credit in the future. Therefore, it is essential that you only apply for a loan if you are confident in your ability to repay and do not lose a single EWI.
In India, the festival season is associated with wealth and wealth creation. During the festival season, many lenders offer personalized loans. If you’re considering an expensive purchase and want to take advantage of these festival-based rental deals, consider the points above and rent responsibly. Be aware that scammers are active during the festival season. Be sure to borrow only from RBI-approved and accredited institutions.