Personal loans are unsecured loans, which are easier to obtain due to less paperwork and lack of a security or guarantor. The rising reason to take a personal loan is:
Debt restructuring
Honeymoon or other family social roles
Self- or family medical emergency
Pay off balances for credit cards
For travel financing
To buy a top-end home appliance
So, whatever your reason to opt for a personal online loan, here are some tips to help you find a product that best suits you:
1. Compare the personal loan interest rates on loans
Perhaps a bank approaches you offering your personal loan "only 14 per cent per annum." Perhaps you visit the bank where you have your savings account and find that "only 16 percent" is the interest rate.No matter how attractive the bank makes the offer seem to you, an important step before deciding which bank to take a loan from is to look for different banks' personal loan terms and compare the interest rates. There are many ways to do this - you can either go to different banks' websites and find out their interest rates, or go to financial websites like DialaBank give you a walkthrough of the rates.
2. Compare Charges and Fees
Interest rates aren't the only things to consider when finding a personal loan. You do need to look at the Bank 's different fees. The regular fees associated with a personal loan are: processing fees, late payment fees, cheque bounce fees, loan cancelation fees and service tax on each service that the bank offers.Of this, the most important is the processing fee, which usually is between 1% and 3%.
3. Look for Stability in Repayment
Most personal loan products come with full pre-payment and partial fees. That means you will have to pay a small fee if you want to pay off the remaining balance of your loan before the tenure ends. Some banks do not charge any mortgage fees, but most banks charge 2% to 5% of the balance sum.This may help you to reduce your overall debt burden by deducting future interest payments but it still sets you back on a Rs. 5 lakh loan by Rs . 10,000 to Rs. 25,000.
4. Find an EMI what you can afford
Before you take out a loan, you must be confident you can make daily repayments to close the loan on time and without any penalties.Or this, you need to know an estimate of the equated monthly installment (EMI) to be paid on the amount you borrow. When you use an EMI calculator it's easy to know your approximate EMI.Through entering the bank's respective values from which you have chosen to borrow, you will get an idea of the amount that will be deducted from your account as a personal EMI loan each month. The larger the number, the more you'll have to pay for the EMI. Make sure your total monthly EMI deductions are not more than 50 percent of your earnings. For example, if you're earning Rs. 50,000 a month, all it in EMI.
5. Examine other potential loan opportunities
Personal loan isn't really the only way to get over an emergency. Approach friends and family to see if they can give you money, especially if there isn't a large amount. This way you will end the whole hassle of paying extra sums to a bank. You must also be careful, though, that having monetary deals can sometimes ruin realtions.So if you are taking an interest-free loan from a family member, make sure you promptly pay them back to avoid tension in your relationship.
You may also want to note, apart from the above points, the interest on EMI's late payment, the bank's integrity from which you borrow, the bank's customer support and the loan term. Whatever you decide, make sure that your finanacial goals and abilities in mind.
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