Banks and NBFCs provide
easy personal loans today. The principal amount is directly disbursed into your
savings bank account within hours of sending your loan application. Moreover,
loans can be obtained with minimal documentation. As a result of this instant
disbursal process, borrowers have become less careful while sending their loan
application and often end up taking on high-cost loans which are difficult to
repay. But there are a few important things that you should take into
consideration when you apply personal loan. They are as under:
You
should consider the loan amount you are eligible for
Whether you choose to apply
personal loan online or by visiting the bank of office of the
NBFC lender, you need to first ascertain that you are eligible for the loan.
You can do this with the help of a loan eligibility calculator available on
every lender’s website. This calculator helps you understand the exact loan
amount you are eligible for based factors such as your age, income, and
employment stability among other things
You
should consider the interest rate charged by the lender
When it comes to loans,
all of us try to choose lenders offering lower interest rates. This should
especially be a priority while applying for personal loans since the interest
rate charged on these loans are higher than most, if not other loans. Look for
a lender who provides a lower interest rate. If you find one, ensure that there
are no hidden charges, as that could likely be the case in case of low-interest
loans.
You
should consider the loan repayment tenure
Along with the interest
rate, you should also consider the loan repayment tenure. Generally, personal
bank loans can be repaid in tenures lasting up to 5 years. The same is true for
loans offered by NBFCs. But the higher the loan tenure, the higher will be the
interest rate levied. As such, you should avoid opting for the maximum tenure
just because it is available. Carefully deliberate the repayment tenure as it
can increase or reduce the actual cost of the loan considerably.
You
should consider the additional charges associated with the loan
Every lender charges
certain fees when you apply for a personal loan in
India. Typically, you have to pay a loan processing fee and
a GST tax. However, there are several other costs associated with loan
repayment and default, which can increase the overall cost of your loan. These
include prepayment charges, EMI default/bounce charges, loan transfer and
cancellation charges and so on. You need to know about these additional charges
before you send out your loan application.
You
should consider the terms and conditions associated with the loan
If you are offered an
instant personal loan, chances are that you would take it on without properly
reading the terms and conditions related to it. This happens more frequently
than you think since these loans are collateral-free. But you must read the
fine print and avoid signing the loan document without thoroughly reading the
terms and conditions. Ensure you know what you are taking on before having the
sums disbursed into your account
Final
Word: Apart from the above-mentioned things that you need
to consider before you apply personal loan, you must also check if you have the
capacity to repay the loan. You can ascertain this with the help of an online
tool known as a loan EMI calculator available on the lender’s website. Simply
enter the loan amount you need and preferred interest rate and tenure and find
out the EMI payable against those figures.
