Personal Loan India: Consider these factors before approaching a lender.

Do you have any medical exigency in the family for which you need urgent cash? Or do you want to shred off high-cost loans or credit card to get out of the debt spiral? And in addition to all these things, today the lifestyle that most of the people wish to live today takes away the major chomp of your savings, right? What about the savings that we must assign for our retirement or emergency fund? So, how a personal loan can help us with this? Or explain, what are personal loans India? Well, unlike a home loan or a car loan, a personal loan comes under unsecured debt, for which a lender does not insist on collateral. And being unsecured in nature, the risk for any lender would be high as they are left with the only option- i.e. legal to resort in case of a default. Hence the personal loans India crafted especially according to the Indian market, and are slightly higher than the ones which are backed by collateral.

Well, a personal loan comes really handy when your need for cash is urgent, and at times when you want to lower your overall debt burden, or even when you want to boost your credit score/CIBIL score. And because of its quick approval process, it is considered to be as an easy way to access funds. But whenever it comes to availing personal loan India, you need to be slightly cautious or you can say aware. This is because you might end up choosing the wrong financial product, and your mistakes can bound lenders to extend a personal loan at high-interest rates. Here, we will tell you what all you should weigh before you decide to sign the loan agreement.

Personal Loan India

Evaluate Your Requirement: Many financial pundits advise that one should not overboard with the loan amount. Well, we all know that personal loans India is an easy way to access funds and are often disbursed within a few days. And, this can make a tendency to go for a larger amount of loan than the actual requirement. So, one should limit the loan amount to what your end objective or purpose is.

Overall Cost: Continuing with the point mentioned above that one must consider the overall cost of the personal loan incurs on your pocket, which includes the personal loan interest rates and the additional fee. If the requirement that you have today is not worth the overall cost, then maybe it is not the wise move to take a personal loan. Try at your level if you can satiate those needs by any other means or not, like through credit card.

Interest Rates: There are two types of personal loan interest rates in the market, and the major thing to go through before approaching to a lender is to check whether the interest rate is fixed or variable. The fixed interest rate implies that it remains constant throughout the loan tenure and a variable interest rate used to change, i.e. increases or decreases according to the ongoing market conditions-index value.

Additional Charges: The accumulated interest is not only the only fees that are charged in a loan, but there are also other multiple additional charges associated with it. Additional charges such as processing fee (when the loan is being processed), late fee, and prepayment fee. Lenders charge a late fee when you are inconsistent with your monthly EMI’s, and pre-payment is when you choose to pay or close the loan amount before the decided tenure.

Choose One: See all and choose one, like they say that you have to kiss a lot of frogs before you find your prince. But in the personal loan India, kissing all the frogs can generate a problem for you. Hence, you should look at multiple loan options, deals and offers before choosing the one, through online loan aggregator’s site and then apply to the ones you feel that your loan can get approved on and can commit to.

Well, these are some of the common factors or things that one needs to consider before you get a personal loan India. If you keep these things in mind, you will never go wrong while borrowing the money.

Hope this information helps you!

Are you planning to take a personal loan? Avoid these few mistakes.

A personal loan is an ideal financial tool when it comes to mitigating your financial issues. There are many reasons to take personal loan India such as renovating your home, debt consolidation, medical attention, etc. however, you will have to consider a few factors before you avail it. You should avoid mistakes else it will make a dent in your wallet. So, here are five personal loan mistakes that you need to watch out for and avoid them.

Don’t Shop around

There are a lot of personal loan options in India; however, it’s not a mandate to pick the first one. Since you have options, you should compare deals amongst top banks & financial companies and shortlist the ones that will match your financial requirements and affordability. Go ahead and see if you have any pre-approved loan offers, as lenders will give you the best personal loan deals. You might want to consider things like interest rate, processing fees, disbursal time, repayment options and loan tenure.

Taking higher interest rates

It’s would be wise to see that if you’re taking a loan for debt consolidation, the interest rate should be low enough to save your money else it won’t make sense. You will find that a variable interest rate has its own negatives and positives such as it might rise in the near future as well. Keep the entire picture of average personal loan interest rate you would pay during the tenure and then decide if you should go for it or not. Else, you have a fixed rate on a safer note.

Personal Loan

Not calculating other charges

Personal loan India come with a lot of other charges such as processing fee, late payment charge, pre-closure charges, cheque delay charges, etc. The processing fee is a percentage on your loan amount, pre-closure is implacable if you close your debt early. Consider all these fees, and try to speak to the lender to waive them off. Consider all the fees that come with your personal loan, and then decide which one is the best offer for you.

Choose right loan tenure

We take a personal loan for a variety of reasons. Lenders offer flexible tenure of 1-5 years, and at times we’re happy to see a loan that gives lower monthly payment option. The deal might be great, but you would’ve to shell out more interest rates. If your goal is to get rid of the debt faster, short repayment tenure will make sense for you.

Fraudulent lenders

Due to the prevalence of online facilities, it’s easier to get loans at attractive deals. Lenders try to lure potential customers with low personal loan interest rates deal. However, with convenience comes the increased risk of falling prey to frauds as well. You should figure out lender authorization and only then approach them. Read reviews online and talk to a financial expert before you plan to avail loan form a particular lender.

Missing your monthly payment

It’s important you make your payments on time. Missing it will damage your credit score and would cost you late fees. If you’ve taken a secured personal loan, and you keep missing out payments, you might lose on the collateral pledged with the loan.

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