Personal loans are the easiest to avail. This ease to get the loans makes them a popular choice among the people in India. Another thing that makes personal loans most sought after is that you do not need to give any collateral or guarantee. Also, the usage of the loan amount isn’t monitored by the lender. These days it is very common to see your mailbox flooded with emails which offer you the best kind of personal loan. These banks and companies offering loans make sure that the offers and deals are customized especially according to your needs and requirements.
If you too are thinking of availing personal loans in India online, you should consider the following factors.
- The interest rate on the loans
It is suggested that before you apply online for personal loans, you do not get lured by just low-interest rates. Do not fall into the trap of low-interest rates. You should rather look if the rates being offered are flat interest rate basis, or reducing interest rate basis. Low-interest rates always don’t mean that you’ll be paying less amount as interest. Therefore, be cautious of the interest rates being charged before you apply for the loan.
- The overall cost involved in availing the loan
If you think that you will have to pay just the interest charges when you take any loan, then you are wrong. There are a plethora of other costs and hidden charges involved in the loan and you should be aware of them. Banks might charge you the processing fee. It can be up to 1-2% of the total loan amount, or some banks and institutions even charge a flat processing fee. This processing fee then adds up to the total cost of the loan and can prove to be costly to you if you do not pay attention to it while you are applying for the loan. Apart from the processing fee, there may be prepayment or late payment fee applicable depending on when you choose to pay back your loan amount.
- Your need should be given priority
It is important that you realize what is important, your need or your eligibility. You can be eligible to avail a loan of 10 lakhs, but it is strictly advised that you should consider your needs and then decide the loan amount accordingly. Bank officials may try to convince you to take a loan of the higher amount, but you should focus on your needs, else you can be trapped and will eventually have to repay more. Borrow only that much amount which you need.
- Consider practical EMIs
It is you who will have to repay the loan. Do not lie to yourself while taking the loan. You need to face the reality that whether you’ll be able to repay the EMIs on time or not. If you think you won’t be able to do that, then choose such EMIs which are feasible for you to repay. Only the person availing personal loans knows his/her ability and thus a true assessment needs to be done. Your failure to repay the EMIs can further land you in trouble in future.
- Avoid lucrative offers and freebies
You will observe that banks and other companies offering loans will try to give you additional offers along with the loan. These additional offers can include accidental insurance or life insurance plans. They’ll tell you that there are no costs and you’ll not have to pay anything afterward. But this will not be the case, and you will be charged at a later stage.
These factors should necessarily be kept in mind before applying for personal loans in India.