In today’s time, personal loan has become an easy and fast way to meet the needs. However, taking a loan based only on low interest rate may prove to be harmful at times. Even a low interest loan taken without proper information and comparison can prove costly in the future. To choose the right loan, it is important that you understand the interest rate as well as other charges, conditions and features associated with it. By paying attention to these important aspects before applying for a loan, you can not only save money but can also avoid future financial problems.
Keep an eye on processing fees
Most banks and financial institutions charge a lump sum processing fee for processing the loan, which increases the overall cost of the loan. Therefore, it is important to compare not only the interest rate but also the processing fees charged by different lenders.
Get information about pre-closure charges
Many banks charge pre-closure charges if the entire amount is repaid before the completion of the loan tenure. In such a situation, before taking a loan, definitely check whether the concerned bank or NBFC imposes pre-closure charges or not.
Customer service is also important
Good customer service is the key to a better loan experience. Before applying, it is important to know how effective the customer care of the bank or financial institution is and how quickly assistance is provided when needed.
Please check the eligibility criteria
Even if a bank is claiming a low interest rate, it is important to ensure whether you meet its eligibility criteria or not. This includes conditions like your income, age, job or credit profile.
Pay attention to loan disbursal time
If the loan is being taken for an emergency need, then the time taken to get the loan becomes very important. Today many leading banks and NBFCs disburse the loan amount within a few seconds or hours.
Also compare other charges
In many cases, a loan with a slightly higher interest rate may be cheaper overall if it has lower other charges. Like- default charge, pre-payment fee, loan cancellation charge, check or EMI bounce charge, instrument return charge, stamp duty, charge for issuing duplicate statement or amortization schedule, etc. Therefore it is important to compare all the charges.
Negotiate for discount
Many times banks or financial institutions leave room for negotiation on the interest rate. Especially to existing customers or long term customers, better interest rates or discounts can be given.
Take advantage of special offers
During festivals or special occasions, many banks and financial institutions offer special offers and lower interest rates on personal loans. Taking a loan at such a time can prove beneficial.
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