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Handy Points To Keep In Mind While Taking A Personal Loan
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Taking a loan is a critical decision. The first thing which comes in mind after choosing to go for a loan is the selection of a reliable and suitable lender. There cannot be a guide who will let you know exactly that which financial institution/lender can be ideal for the personal loan as every individual have their own requirement, financial status and choice.
The market is full of financial institutions with plenty of exciting offers but, you will need to be very cautious while going with an option as this is not just another shopping.
This decision could affect the lives of many individuals and therefore will need special care and attention. But, how would you make a choice between these banks, financial institutions and private money lender? In this blog, we will share our tips on how to compare and select the right lender for your personal loan.
There are certain things which you should keep in mind when you're comparing loans from various Lenders/NBFC's. We're just here to assist you but the decision is actually yours.
Comparison really needs to be rational and therefore it is important that we compare based on top parameters:
Personal Loan amount provided to you is different in almost every bank and financial institution. It is important that you simply check with the bank or the lender about the amount of personal loan they can release as a personal loan.If you need a higher amount of loan then search for a bank which can provide that amount according to your yearly salary. There are lenders who offer as high as 25 lakhs in a personal loan.
You can select HDFC bank personal loan in this scenario.
Rates of Interest
The next thing which you should compare is the interest rates offered by multiple banks. Who wants to pay more when there are choices available for lower loan rates?
It’s easy to check loan rates of a lender or a financial institution. You just need to search online or logon to the official site. However, the actual rate of interest offered to you may differ depending on various factors. Let's say, if you have a good rapport as an account holder in a bank, that can work in your favor for fixing of interest.The average loan rates range from 10% to 40% based on your credit score.
To process the application form there is a small percentage service fees which bank charges from the consumer.
The fees also known as processing charges. It is the loan company which decides on the percentage of the processing fee to be charged from the consumer.
For example, if your loan amount is 1 lakh and processing fee is 2%, you'll need to pay 2% of Rs 100,000 (i.e. 2,000) as processing charges. Processing fees percentage is mostly between 1.5% to 2.5Percent of the disbursed amount if your loan amount is large then processing fees will have an impact on your pocket and hence should be a selecting factor of your lender.
First thing which a lender or an NBFC checks is your personal loan eligibility. There is absolutely no point even looking at getting a personal loan if you are not eligible for it. If you have not checked the eligibility on the lenders website for personal loan, then please check it now. If you do not do that in the beginning, then chances are you'll end up killing lot of time and your energy.
I'd personally say this should not be missed at all.
Documentation for a loan can be really frustrating sometimes but submitting your essential documents is important for loan approval. Getting papers necessary for a personal unsecured loan shouldn't be very difficult as it only require ones which we have already like Aadhar card, Tax proof and bank statements. Often we all come across a situation when we don't have the correct documents at the right time. So, peaking into documents section of lenders gives an idea of what is needed.
Concern with high repayments and equal monthly installments will be there whenever an individual takes a unsecured loan. One of the nightmares of the loan buyers is repayment of the EMI's. There ae options tpo step up the EMI's, step-down the equated monthly installments and part payments from financial institutions which makes it much easier for customers to pay back the loan installments without defaulting.
One should check the equated monthly installments and his compare it with the paying capacity. The right payment option will resolve half of your stress as you will be able to easily pay without delay.
Longer the loan duration, lower the EMI. If you think that your personal loan EMI is beyond what you can pay then you should think about increasing your personal loan duration. Most of the banks will allow you to select the loan term according to your bank statement and salary. For example, you can choose a flexible duration which ranges between one to 5 years while taking HDFC personal loan. You can find information on community forums and Q/A websites such as Quora.
Every individual wishes to pay the personal loan installment on time but, sometimes they're not able to pay it because of any reason. Banks and NBFC's are familiar with these problems very well. But as they want the default to be minimum, they have certain penalty / default charges for overdue payments. Our life is uncertain and so it is important that even when you believe that you will pay all the equated monthly installments when they're due, you should check on the penalty charges to be taken by bank when there is a delay in the installments.
Lenders face lot of default in lending products and hence they decide the % or fixed fees on delay of the payment (it can be both too). Penalty also acts as a reminder for borrowers to EMIs on time.
As we told you earlier, the charges may vary from bank to bank and even dependent on your rate and time you have defaulted.
Loan providers are transparent about all of these parameters on their site or the papers which you sign.
Unfortunately, people ignore parameters at the time of personal loan application and pay the price when time comes.
They think that the most important thing is to have the loan as early as possible. Our suggestion is to do an extensive homework with at-least these shared parameters before you apply for a personal loan.
Your Loan Advisor is best Advisor in market for best advice and solution for Personal loan. You can also check Points to consider while taking a Personal Loan.
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