Your First Personal Loan? Crucial Things to Know Before You 'Apply'

Taking a personal loan for the first time is an important financial milestone. It offers you the freedom to achieve your major life objectives, such as easily combining costs, financing a dream buy, or handling an emergency.

Studies show that in FY 23–24, Indians took nearly 14 crore personal loans worth about ₹9 lakh crore. Most of these borrowers were under 35, with many experiencing credit for the very first time. If you're considering applying now, a personal loan can be a smart, flexible way to access funds when you need them most.

Ready to make your first loan a smart move? Read on to learn how.

Your Guide to a Stress-Free First Personal Loan: 6 Tips

Here are six things every first-time borrower should know before applying:

1. Get to Know How Personal Loans Work

Think of it this way: when you take a car loan, the money only goes toward the car. With a home loan, it's only for the house. A personal loan works differently. It isn't tied to one purpose, which gives you the freedom to use it where you need it most.

• It's unsecured, so you won't need to pledge property, gold, or other assets.
• Depending on what suits your monthly income, you can choose a payback period that ranges from 12 months to usually up to three years.

But repayments start almost immediately. Without a plan, EMIs can stretch your budget and cost you more than expected.

The fix? Use our personal loan EMI calculator to see your monthly outgo before you apply.

2. Go Digital and Skip the Stress

Would you rather stand in queues, fill forms, and wait for days? Or get it done on your phone in minutes?

The way you apply determines how smoothly your first loan goes. And if speed and convenience are on your mind, digital is the smarter route.

• Get fast approvals with instant checks, video-KYC, and e-signatures
• Apply anytime, anywhere, no branch timings to worry about
• Cut down errors by uploading documents securely online
• Stay protected under RBI's rules on consent and data safety

With the Hero FinCorp digital lending app, you get all this in one place and money credited into your account when you need it most.

3. Know Your Credit Score

It's the first trust signal lenders check. A higher credit score tells them you're dependable, unlocking easier approvals, lower rates, and lighter EMIs.

• 750+: Excellent, safe zone with best terms
• 650–749: Fair, likely approved but at higher rates
• Below 650: Risky, you'll need to prove repayment strength

Before you apply, boost your credit score. Pay off small dues, clear your credit card, and fix errors in your report. Even a small jump can cut interest and ease your EMIs.

No credit score yet? That simply means you're new to credit and you've never used a loan or card before. In such cases, lenders rely more on your salary, employer, and repayment capacity.

The catch? You'll likely qualify for a smaller amount or higher rate than someone with an established score.

4. Check Your Eligibility

Once your credit score is sorted, lenders ask the next big question: Can you afford the EMIs every month? That usually comes down to two checks:

• Monthly Income: Although the exact cut-off varies, lenders typically want a minimum of ₹15,000 to ₹25,000 per month. What matters more than the size of your pay cheque is whether or not your income is steady and dependable.
• Employment History: Lenders will see that you have a steady income if you have worked at your current job for at least six months.
• Age: Most lenders impose a minimum and maximum age limit (typically between 21 and 58 years old) to ensure that repayment falls within your working years.

Not sure if you qualify? Run a quick eligibility check online and borrow with confidence.

5. Figure Out How Much You Actually Need

It's tempting to grab the biggest loan you're offered, but more money means higher EMIs and extra stress from day one.

• Borrow only what you'll truly use. If you need extra later, you can always explore a top-up or short-term loan.
• Avoid taking too many loans unless absolutely necessary. This is the fastest way into a debt spiral.
• Keep 2–3 months of EMIs in savings. It'll act as a safety cushion to handle emergencies without missing payments or hurting your credit score.

Need funds quickly? Hero FinCorp offers quick personal loans up to ₹5 lakhs

6. Read the Fine Print Carefully

We all like the sound of a "low interest rate," but don't get carried away by the headline.

Add in fees, insurance, and penalties, and that bargain loan may not be such a bargain after all.

For example,

On paper, Lender A looks cheaper. But once you add all the charges, you end up paying ₹10,000 more than Lender B.

Before you sign, always ask for a Key Fact Statement (KFS). According to the RBI, it must show you the Annual Percentage Rate (APR), which bundles interest and all charges.

Apply for Your First Personal Loan with Hero FinCorp

Taking your first personal loan is more than just borrowing money; it's a major milestone in your financial journey.

The secret is to borrow wisely: determine your eligibility, comprehend the associated fees, and select a loan amount that is easily within your monthly spending plan.

And with Hero FinCorp by your side, you get the flexibility, transparency, and speed to make it happen. So why wait? Connect with us today and turn your financial goals into reality with your very first instant personal loan.

Frequently Asked Questions

1. Will too many loan applications pull down my credit score?

Yes. Lenders perform a hard check each time you apply, which somewhat reduces your credit score. Instead, use free eligibility checks, which have no bearing on your score.

2. Is it safe to apply for instant loans online?

Yes, if you choose trusted lenders. Hero FinCorp follows RBI rules, uses encryption, and keeps your data secure.

3. Can a personal loan improve my credit score?

If you pay back on schedule, yes. Frequent EMIs increase the likelihood of future approvals and strengthen your credit history.

Disclaimer: The information provided in this blog post is intended for informational purposes only. The content is based on research and opinions available at the time of writing. While we strive to ensure accuracy, we do not claim to be exhaustive or definitive. Readers are advised to independently verify any details mentioned here, such as specifications, features, and availability, before making any decisions. Hero FinCorp does not take responsibility for any discrepancies, inaccuracies, or changes that may occur after the publication of this blog. The choice to rely on the information presented Here is at the reader's discretion, and we recommend consulting official sources and experts for the most up-to-date and accurate information about the featured products.