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7/01/2016

Things you should take care off before applying for the personal loan





Personal loans can be really effective in solving your personal problem. If you want to pay a large bill or want to pay off your debt, you can opt for personal loan. It can also be used for funding new business venture.

Here are few things that can help you in finding a great personal loan for yourself:

Do not apply through third parties:
There are many agencies who had tie up with banks who act as a intermediate between customer and banks. If we go through them they may eat up money with us. Its always better to directly speak to the bank executives.

Interest Rates:
Before applying loan with any bank,  approach the possibility with other banks and interest rates. Interest is not fixed for them we need to bargain as much as possible . Initially they will say some numbers but later they will reduce it. We also need to be careful when they reduce the rate of interest ,they may add some hidden components.

Do not agree any oral promise:
Always there should be written document what ever the promise they gave. They will say so many things in phone, We also think like everything will be applicable for our loan. Fact is not true. So we should be very very careful before giving the final confirmation, need to check all the promised items are present in the mail. We should not ignore like they have confirmed over the phone.

Insurance :
This is not a mandatory for some banks and some banks its mandatory. We need to negotiate as much as possible on this.

Processing Fee:
This is another  area where we loose our money. Many banks are taking 1 to 2 %,this is not fixed here also we need to do a negotiation.

Part Payment:
There are some banks who allows part payment and pre closure options. If your planning to close early we need to check this feature is available with the product. Here also there is a catch there will be addition charges if we pay more than 25 % of the amount. They will not disclose this initially but we will come to know after taking loan.

Figure out how much you can afford:
Taking loan for higher tenures may result in paying more interest towards the loan. Thus before you plan to apply for the loan, see the maximum EMI payment that you can afford. As you determine the budget, you can apply the loan and you can pay back the same at much ease.

Repayment Penalties:
Hard to believe, but there are lenders who charge penalty fees for paying off the loan at an early basis. Hence it is recommended that you should find a loan where there are no penalties for early payment.

Choose the right Interest Rate:
There are two types of interest rate in general which are fixed and variable. Fixed interest rates may seem to be higher than the variable interest rates However, the monthly payment does not change as you go for fixed interest rate. Thus it is much safer to opt for a fixed interest rate.

Secured vs. Unsecured Personal Loans:
Unsecured personal loans come at a higher risk. However if you have any asset against which you can get the loan, the interest rates are much lower. However since you are keeping the asset at risk, you should ensure that you will be able to pay off the loan in time.


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