personal loan
Personal Loan: In today’s times, taking a personal loan has become easier than ever. The offer appears on the mobile app, KYC is done within a few minutes and the money comes directly into the account. Getting such a fast loan does not leave people feeling that they are going to take an expensive loan. Personal loan is definitely helpful, but if taken without thinking, this relief can become a big problem in the future.
Most people first look at EMI while taking a loan. Seeing the low EMI, it seems that the loan will run smoothly. But lower EMIs often mean longer tenures. As the tenure increases, the total interest also increases. The difference of a month seems small, but in 3 or 5 years this difference turns into thousands of rupees more. It is wise that along with the EMI, you should also see how much money will have to be paid in the entire loan.
Trusting only one bank can prove costly
Often people take personal loan from the same bank where they have their salary account. The facility is definitely there, but the interest rates and charges of every bank or NBFC are different. Even just 1 percent more interest can make a big difference to the entire loan. Comparing two-three lenders does not take much time, but it can reduce the burden on your pocket significantly.
Do not take hidden charges lightly
Processing fee, GST, documentation charge and sometimes insurance are also added to the personal loan. This amount seems small at first glance, but as the loan amount increases, this expense also increases. In many cases, this fee is deducted even before getting the loan, due to which less money comes into the account than expected. It is very important to read the charges section carefully before signing the loan.
Long term is not always beneficial
Long term loan definitely makes the EMI lighter, but it also prolongs your financial freedom. When an EMI continues for years, it can affect your home, children’s education or any big investment plans in the future. If your income allows, it makes more sense to choose a shorter tenure. Due to this, interest is charged less and the loan gets eliminated quickly.
Prepare for repayment even before getting the loan
Often people consider getting a loan as the last step, whereas the real responsibility starts from there. It is easy to spend the money as soon as it comes, but EMI is deducted on the fixed date every month. It is better to set up auto-debit before taking the loan, keep money aside for the first EMI and if you plan to make prepayment in future, understand its terms and conditions. Preparation done in advance can save you from mental stress.
Personal loan can help in marriage, medical emergency or important expenses, but making it a means of lifestyle expenditure is harmful. A loan taken thoughtfully helps you, whereas a loan taken in haste remains a burden on your earnings for a long time.
Also read- Want quick freedom from debt? Adopt these three effective loan repayment measures
(Disclaimer- TV9 Hindi does not advise any kind of financial investment. This news has been written only for informational purposes. Before investing anywhere, please take expert opinion.)