Here are some tips that you should consider before taking a personal loan:
Compare interest rates for loans:
Maybe a bank is approaching you to offer your personal loan "only 14 percent annually." You also get to the bank where your savings account is located and find an "only 16 percent" interest rate. Even while the bank's offers is attractive, it is essential to investigate the personal loan conditions of various banks and to compare interest rates before you decide which bank to take a loan. There are many ways of doing it – either you can do your own research on different banks' websites and find their personal loan interest rate, or you can visit financial sites to provide you with the information that you need on the basis of your input requirements.
Comparison of charges and charges:
Not the only things that need to be compared when choosing a personal loan are interest rates. The different fees paid by the bank must also be examined. The fee norms are processing fees, late payment fees, check rebate fees, loan cancellation fees, and service tax for every service provided by the bank. The most important of these is the processing fee, usually between 1% and 3%. Some banks may have a special temporary offer.
Seek flexibility in repayment
The majority of personal loan products are prepaid in full and partially. This means you have to pay a small fee if your loan remains outstanding before the tenure ends. Some banks do not charge any forfeiture, but most banks charge 2% to 5% of the balance. That may help you reduce the debt burden by deducting future interest payments but still makes a 5-lakh loan of Rs. 10,000 to Rs. 25,000.
Find affordable EMI:
You must be sure before taking a loan that you are in a position to repay regularly to complete the loan without penalties on time. To do this, you must know that you have to pay the amount you borrow on an equal monthly installment (EMI). When you use an EMI calculator, it is easy to know your approximate EMI.
For example, You can repay your Canara Bank personal loan in three ways:
- SI
- ECS
- PDCs
Examine additional loan options:
Personal loans are not always the only way to handle an emergency. Check with friends and family for money, especially if the sum is not significant. This enables you to eliminate the entire hassle of paying a bank extra. However, you must be careful that monetary transactions can sometimes ruin relations. So if you take a family member's interest-free loan, ensure that you pay it back quickly in order to avoid tension.
Less documentation:
The best personal loans can be obtained with the least amount of fuss. The last thing you want to do, for example, is to submit many documents and fill out several forms when you're in a hurry to get some cash.
Your bank could provide the best personal loan. You are given all your personal and financial information and therefore don't have to worry about excessive checks. And you could get this money in no time at all in those days of internet banking.
CONCLUSION:
Personal loans are the type of loan easiest to access, and the approval process in comparison with other categories is also less stringent. But that does not mean that you will opt for a relaxed repayment tenure or a very short tenure in relation to the amount of your loan.
False lending hurts your finances significantly and becomes a burden. If there is a default, the consequences are far-reaching, as it will restrict your financial accessibility for a long time.
Therefore, analyze all the advantages and disadvantages of various loan tenures and read the personal loan documents before your assignment is determined. Any repayment schedules you choose are strictly adherent to the repayment schedules to avoid unnecessary discomfort.