Parameters to Consider While Availing a Personal Loan
Any borrower before taking a personal loan should do proper research and planning to avoid any confusions and complications in the later stages of the process. Here are some of the factors that you should keep in mind and consider while availing a personal loan.
Interest Rate:
One of the crucial factors while taking a personal loan is the interest rate. Depending on multiple factors like your income, age, credit score, and existing EMIs, the interest rate varies. A personal loan EMI calculator can also be used if you know the interest rate to calculate the total cash outflow. However, it would help if you always compared the interest rates from multiple lenders.
Tenure:
Although a 5-year tenure is a maximum for a personal loan yet, it is beneficial to keep the tenure short. Opting for a longer tenure will reduce EMIs, which makes repaying the loan comfortable but increases the interest cost. In contrast, the lower tenure will increase EMIs, but the interest cost remains low.
Processing Fee:
You should always check for the processing fee and other charges because that affects your total spending on a personal loan.
Salary:
The salary of the borrower is proof highlighting the repaying capacity. Hence, the lender can ask for salary slips.
Repayment Flexibility:
It is good to ask if there is a provision of repaying the loan sooner with the cost that will apply. Paying the loan before time will give you a sense of satisfaction and help you in managing personal finances.
Terms and Conditions:
It is essential to go through the terms and conditions to ensure that you make the right choice. This will also avoid issues and will provide you with a hassle-free experience.
Post a Comment