I’m planning to take a personal loan. Can you please give me suggestions on what to consider before buying one?
Since personal loan is an unsecured loan, each bank offers different interest rates. Before taking a personal loan, compare which bank offers you the best interest rate and processing fee. A few banks offer incentives in terms of interest rate discounts and processing fee reductions. Before signing up for a personal loan, ensure that you are aware of the terms and conditions, service charges, processing charges and all foreclosure charges. Click the following link to know more: http://bit.ly/1pxFUdk
There are a number of factors you need to consider before choosing a Personal Loan. These include processing fee, interest rate, prepayment charges, foreclosure charges and tenure of the loan. Please read this blog post for more information - https://blog.bankbazaar.com/personal-loan-handbook-all-questions-answered/. Click here to check your eligibility - https://www.bankbazaar.com/personal-loan.html.
So, when it comes to taking out a loan there’s a few major things you should be considering. The order in which these appear will probably change depending on who you ask, but they’ll usually all be in there. So:
Your Credit Score
What’s your credit score and credit history look like? This is one of the major deciding factors in just how much you’ll end up paying in interest, and ultimately how much you’ll be able to borrow.
Rates & Fees
Rates and fees vary depending on who you apply to, and what financial institutes you apply for your personal loan from. Banks and Credit Unions, for example, both have wildly varying fees and considerations.
Are You Eligible?
It sounds like a silly question, I know, but it’s an important one! Are you eligible for a loan? Do you meet the loan provider’s eligibility criteria? It may be worth checking before you invest time and effort into applying for a loan you won’t get!
That about wraps up my major thoughts here. Hopefully that helps, and best of luck with your application!
8 Things to Consider before Availing Personal Loan:
1.Flat Interest Rate or Reducing Balance Interest Rate
Do not just fall for the lowest interest rates. Do read about whether the loan is offered on flat interest rate basis or reducing balance basis. Flat interest rate loan are typically offered at much lower interest rates. However, that does not mean you are going to pay less.
2. Assess the All-In Cost
Interest cost is not the only cost that you have to bear. There are other charges too. Consider the following costs. (i) Processing Fee (ii) Prepayment Fee (iii) Late Payment Fee
3. Consider Your Needs, Not Eligibility While Borrowing
4. Shop for Better Rates
Shop around for better rates. Do not actually apply to check the rates.
5. Make Sure You Can Service the EMIs
Be honest to yourself. No one knows about your repayment ability better than you. Not even your bank does. Do an honest assessment. If you feel you cannot service the personal loan EMIs, do not take a loan. Try talking to friends and family. Failure to service EMIs will result in penalties and also spoil your credit history.
6. Check Your CIBIL Score before Applying
Banks and other credit institutions consider your CIBIL score while sanctioning loans. A low credit score can either get your loan application rejected or the bank may increase the interest rate.
7.Avoid Add-On Offers
Sometimes, while selling personal loans, banks also pitch for additional products such as accidental insurance plan. You are told that you will not have to pay anything upfront. The insurance premium will get added to your EMI. Simply say NO.
8.Talk to Friends and Family
If you are taking personal loan to tide over short term cash crunch, try talking to friends/family if they can lend some money. Perhaps, they won’t even charge any interest. However, be sure you can return the amount as promised. Otherwise, you might end up jeopardizing the relationship/friendship. Therefore, be honest to yourself and your friends/family about your repayment ability.