Consequences of a personal loan

There’s an old saying that all your actions have consequences. It is very important to pay attention to the consequences of action so that you don’t regret making that decision in the longer run.Taking a personal loan is a big decision as it will impact your finances for the upcoming year or years depending on your payback period. It is important to have a comfortable payback period that suits you as an individual in order to be able to make timely payments. Timely payments are very important in a personal loan as failing to do so comes with large penal interest and it also goes onto your credit score.  

Pay attention to the personal loan interest rate closely sometimes personal loan interest rates can be very high and their repayment periods are only 60 months. Make sure you will be able to pay back the money along with the interest in that time period. Personal loans all come with a processing fee of 0.50% or 1%. This amount is deducted from your disbursement or added to your payback amount. Calculate how much money you need from the personal loan for your purchase and make sure you deduct the processing fees from them.

Origination fees are also to be paid when availing of a personal loan. If you need the exact same amount of your loan then at the time of availing a loan pay all these fees in advance. When taking personal loans for consolidating debt pay close attention to every credit card’s interest rate and personal loans interest rate. Keep in mind consolidation only helps if it has a lower interest rate or else your debt just looks different than it was.

The biggest advantage of a personal loan is that it can be used for any expense that you want to make. So, if you are going to have big recurring expenses rather than getting two different loans just take one consolidated loan as the second loan might not get approved because of the first loan.

They are the most helpful to people with no collateral to keep for the loan hence their interest rates can be higher than a car loan or home loan. Although for people with good credit scores will be able to secure lower interest rates which can be beneficial as you are not risking any collateral property that you own. Muthoot finance personal loan provides loans from 10,000 rs. To a whopping 1 cr. They provide repayment periods of 12 months to 60 months. The personal loan interest rates are calculated with your credit score. You can also keep collateral and get a secured loan with a lower interest rate.