Personal loan: If you want to apply for a loan, it is important to follow certain steps to get the best deal. First, you need to make sure the bank (or lender) is credible and trustworthy. Then it is vital to note that the loan amount is within a comfortable range.
Aside from this, borrowers should make sure the processing fee is not exorbitant. Additionally, one should make sure there are no hidden charges in the loan. Let us take a look at these aspects in greater detail:
Planning to borrow? Follow these points
I. Credibility of lender: Regardless of temptation, the borrower should make sure the lender (which could be a bank, an NBFC or a fintech loan provider) is credible and trustworthy. Just because a lender is providing a quick loan (within 15 minutes), it does not mean that you must opt for it. It could be an illegitimate or unauthorised lender. Read this article for details.
II. Processing fee: Then, one should make sure the processing fee is within a comfortable range. An excessively high fee should be avoided. Some lenders charge a small amount, whereas a few lenders levy a small percentage of the loan amount, for instance, 2-5 per cent. Read this Livemint article for details on processing fees.
III. Loan amount: Another salient point is the loan amount. It should be small enough to be repaid easily. But when you borrow too big an amount, it gets hard to repay. This can throw you into a debt trap – a practice which must be avoided.
IV. No hidden charges: Additionally, borrowers should make sure that there are no hidden charges in the personal loan they are applying for. This can be checked by going through the reviews of previous customers.
V. Rate of interest: Last but definitely not the least, one should make sure that interest rate is not exorbitant. Check here the latest personal loan interest rates charged by different banks.
Disclaimer: Mint has a tie-up with fintechs for providing credit, you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. Mint does not promote or encourage taking credit as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.
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