Personal Loan Must Read
Why Personal Loan ?
In internet era, every other thing is just a click away and so is money and loan. Those time has passed when people got to wait for months to get their loan sanctioned. The loan process nowadays is very simple and customer friendly. These days, people can’t wait to get desired things in years if they don’t have cash right now. This is when Loan comes into existence.
These days, Banks has made the loan process quite simple, but It is always advisable to be careful while taking loan. Loans such as Personal Loans has its own benefits like unsecured loan, fast processing but are usually expensive. It does have its drawback. The Banks that gives personal loan might not always describe you the entire charges. So, one should carefully check all the details of the loan before finalizing any Bank.
Quick Loan Tips
Compare exact – Emi, Interest Rate, Processing fee, Tenure, Documents before choosing bank.
Never Pay any fee to anybody to get loan sanctioned. Processing fee is deducted from Loan amount only.
Only give Documents to authorized employee of a single selected Bank only.
Below are helpful loan tips to remember while taking a loan:
–Market survey: One should do a detailed market survey of all the options available by different Banks including offered interest rate, per-payments charges if any, and other Terms & Condition..
-Compare Interest Rate: It is the major share of cost amongst all factors you pay for the loan. Therefore, one should taken the cheapest interest rate. And ensures its not a flat personal loan interest rates as it seems cheaper but are, in fact the most expensive all. For eg. a 8% flat rate would have effective cost of 14%.
Its advisable to choose a daily reducing balance option than any other reducing option or flat rate option. However, mostly, all banks use daily reducing balance for calculation of EMI.
–Compare Processing Fee, Pre-Payment & Administrative Charges: When one takes loan, the loan not only carry the Principal and interest but also other charges as well which may include Processing Fee that bank charges to process loan file and pays it to the processing hubs, charges might vary from 1 to 2% of the loan amount sanctioned by the bank. Apart from this, there is Pre-Payment Charges that loan carries for as a Pre-Closure charge for the Loan. It is always advised to take loan from the bank that charges no penalty for the pre-closure (closing before the tenure ends) of loan as it may happen in the future that you would have enough money to pay your debt to save interest on the same.
-Compare EMI: It is suggested that EMI amount should be not more than 40% of your monthly salary and one should consider all offers available in the market from banks as a little research, may save you thousands of Rupees. If the EMIs offered is a bit more that affordable. Reducing the loan amount or increasing the tenure will help.
-Ask for Documents: Ensure every aspects of loan by checking all of offers are supported by relevant papers. And do ask Bank officials to provide the key aspects of the loan on the Bank Letter Head including EMI, rate of interest, processing fees, pre-payment charges, payment schedule, all terms & conditions etc. and do go through the papers before signing.
-Personal Information: Never hide any information or provide wrong information as it will be counted as fraud and may led you to troubles.
-Never Sign Blindly: Never sign blank documents and do read the documents before signing any documents. Don’t rely much on Bank executive in filling the form, prefer filling it yourself.
In the end, once you get the loan, try your best to pay off your loan as soon as possible as banks earns from the interest you pay. The interest component is large during the initial months and it gradually reduce with each payment and with each successive payment, you’ll pay more towards the principal and less in interest. So, its better to close you loan sooner as it may save thousands of rupess! 🙂