Banks provide easy access to Personal Loans today. The principal amount gets directly credited to your Savings Account within hours of sending the Loan application. Moreover, you can get the Loan with minimal documentation. Owing to this process, many are less careful when sending their Loan applications and opt for high-cost Loans that are challenging to repay.
But there are some aspects to consider when opt for a Personal Loan. These include:
Check the eligible amount
Whether you apply for Personal Loans online or offline, you should first check your Loan eligibility. Use the Loan eligibility calculator for this purpose. This calculator helps you understand the exact Loan amount you can get based on your age, income, and employment stability.
Consider the interest rates
When it comes to Loans, try to go for banks offering lower interest rates. This should be a priority since the Personal Loan interest rate charged is generally higher than other Loans. Look for banks that offer a lower interest rate. If you find one, ensure that it does not involve hidden charges, as that is the case with low-interest Loans.
Consider the repayment tenure
Besides the interest rates, consider the repayment tenure. Most Loans can be repaid within five years, and the same is true for Loans offered by other banks. However, the higher the Loan tenure, the more the interest rates. Avoid opting for the maximum term only because it is available. Check the repayment tenure, as it can considerably increase or reduce the Loan cost.
Check for additional costs
Every bank charge a specific fee when you apply for a Personal Loan. Typically, you need to pay a processing fee and a GST tax. However, other costs are involved during repayment, which increases the overall Loan cost. These include prepayment charges, equated monthly instalment default charges, Loan transfer, and cancellation charges. You should be aware of these before sending the Loan application.
Read the associated terms
If you consider a Personal Loan from the bank, chances are that you would take it without reading the conditions. This happens more frequently than you think, as they are collateral-free. But you should read the fine print and avoid signing the Loan document without reading the terms appropriately. Ensure you know what you get into before the sum gets disbursed to your account.
Conclusion
In addition to the mentioned aspects, check if you can repay the Loan. You can ascertain this through the Personal Loan EMI calculator on the bank website. Enter the Loan amount you need, preferred interest rates, and tenure, and find out the EMI payable against those figures.
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