Things To Care before Choosing Personal Loan

A person loan can benefit individuals in many ways. In fact, a loan of this type can serve numerous purposes related to personal expenses. In India, there are many people with no significant knowledge on personal finance/loan. They are also not aware of prevailing rate of interest imposed on personal finances.

This is surely a dilemma for first time borrowers and that’s what makes them know various terms related to personal loan in India. In this context, the borrowers should opt for the loan with inexpensive offer. Most lenders offer loan with higher rate of interest ranging from 14%-25%. In this sense, borrowers should understandably research deeply to get lenders with low rate personal loan offer.

In addition, borrowers should ensure if there is any hidden charge imposed on personal finances. For example, SBI personal loan involves processing fees, stamp fees and lawyer’s fees. They are mandatory and borrowers have to pay them at any cost. Without prerequisite payments, banks don’t process documents submitted by applicants.

Furthermore, you should ensure whether or not your lender imposes prepayment penalty on personal finance. In most situations, applicants end up with paying penalty for prepayment. This happens due to ignorance about prepayment penalty. Make sure of what percentage of prepayment penalty is charged in case, you presumably want to prepay your pending loan.

Potential borrowers should ensure about pre-existing conditions of lenders on their loan offer. Most lenders don’t enlighten customers in this regard. In addition, make sure about EMI and loan tenure that you will avail through your loan. Personal loan with lower EMI and extended tenure is optimal and rewarding. However, some loans of this type are not cost-effective in the long run. To get the best idea, use personal loan EMI calculator. In addition, bad credit score is daunting factor to get personal finance, especially the unsecured one.

Virtually all the banks in India are reluctant to borrowers with bad credit score. But applicants with clean credit score easily avail the finance. Here, the credit score is predetermined as per the given financial transaction record of borrowers. If they incur hefty outstanding loans from previous lenders, they can’t avail finance. But if the financial transaction record is clean with no pending loans from any previous or existing bank, they can avail the finance with ease.

Hence, borrowers should clear off their pending loans beforehand in this regard. Borrowers like salaried individuals and self employed individuals have to deposit documents separately. Approval of personal finance is based on bank’s subjective decision.

There are some vital points to consider when it comes to getting personal loan. Banks or lenders that offer personal loan have their respective terms and conditions with personal loan. Borrowers should understand them to get the best deal on personal loan.