Personal Loan In India
A personal loan is a kind of financial assistance that you avail from a bank in order to spend it on various expenses such as wedding expenses, travelling expenses, shopping expenses and others. This loan is of two types, secured and unsecured loan. In India, you can avail either of the loans as per your personal need. Loan borrowing process in India always follows documental procedure of the concerned bank; however, a loan of this kind involves minimal documentation.
Hence, a borrower can avail the loan without having to experience much documentation in this regard. But it is only unsecured loan that involves minimal documentation. As per acquisition of secured loan is concerned, you need to secure collateral and should have clean credit score according to mandatory criteria of any bank in India offering secured personal loan.
When it comes to acquiring personal loan in India, there are some areas that warrant your attention in this regard.
These areas include personal loan interest rates, loan amount and loan tenure plus repayment options. Most banks claim flat interest rate on personal finance but in reality, it is hidden danger. You will end up paying around 13% interest rate on flat rate of 7% on your loan. Hence instead of choosing flat rate option, you should opt for a monthly reducing balance option or half-reducing option. Better grab the opportunity of interest free personal loan if available but ensure that it is not a lurking danger for you.
Personal loan with processing or prepayment charges may cost you dear so the best way to avoid paying additional cost is to argue your bank about availing zero processing fees and no penalty over prepayment option.
If none of the option is available, better grab a loan with lowest interest rate. In addition, payment of the loan usually follows EMIs basis which largely depend upon duration and the amount of the loan.
Make sure that all the deals and offers over personal finance are supported by genuine and relevant documentation. In this regard, you should demand signed document from your bank. The document should include information such as interest rate, processing and prepayment charge, late payment penalty and others pertaining to your personal loan. You should sign document after carefully studying all the terms and conditions.
At last, never enlighten bank with false information as this may land in trouble. Moreover, don’t sign a blank document and fill up the form yourself rather than getting it filled up by a bank’s executive.