A personal loan is an amount of money which you borrow from a bank, building society or other financial institution. Ordinarily, you will receive a lump sum. In return, you agree to make regular repayments, usually monthly. Personal Loan is a every purpose loan whether it is the marriage of daughter, renovation of house, study of your childs etc.Here are some tips that you should be awareof before applying any personal loan.
Tips
1.Get an estimate of how much money you can borrow.
To start with, it's important to get a good estimate of how much money you can borrow.Knowing your borrowing capacity in advance saves you time.
2. Get a good estimate of your repayment capacity.
The loan amount granted to you also depends upon your repayment capacity. The loan is repayable in the form of Equated Monthly Installments (EMI). The EMI typically should not exceed 50% of your monthly household income. You can also opt for clubbing your spouse's income along with your income if you want to enhance the loan amount that is sanctioned to you
3. Check out the interest rates being offered by different institutions.
The interest rates vary, depending on the tenure of the loan and the amount of the loan. The interest rates offered by one institution can be more than that of other institutions for a particular tenure, and can be less for a different tenure. A loan should fit your pocket and the term you wish to take it for. You should get quotes of all the finance companies and map them according to your requirements.
4. Compare loan schemes of different finance companies.
Compare loan schemes of different finance companies on parameters suh as interest rates, pre-payment clause, and upfront margin to be paid, Maximum loan amount, eligibility, etc. Check - What the monthly loan payment is and what interest rate that translates into The duration of the loan Whether or not the scheme fit with your requirements
5.. Read the Documents carefully:
Try to get a copy of the agreement or contract before you get into one. Understanding the important clauses within the agreement can help you avoid a lot of trouble in future. You can get all ambiguities resolved by speaking to the staff of the bank or finance company, in whose favour you shall be drawing the post-dated cheques towards repayment of your personal loan. In case you are uncomfortable with the terms, simply don't take the loan from that lender.
6. Basic Document you need in your Hand:
7.Fulfill all the formalities:
After you have fulfilled all the formalities to the satisfaction of the company, the company will send the documents along with post-dated cheques to their processing centre. It is good to have PDC's ready on intimation from the bank about approval of the loan. Some banks take 2 to 3 weeks to use PDCs. If the PDCs are ready loan disbursement will be quicker
8.Pay the installments on time.
Once the loan has been sanctioned to you, make sure you pay the installments on time. This will help you to maintain a good credit relationship with the lender.
Ready to Apply for Personal Loan!!