Applying For Personal Loans? Remember These Points!

[Shashank Bhaskar]

You require money to fulfil your needs and pay for other priorities. There are situations where you need to borrow finance to meet urgent needs and medical emergencies. Everything in this world revolves around money. You can lead a peaceful life without worries if you have sufficient funds. However, banks offer several Loan options to customers.

A Personal Loan is an unsecured and collateral-free financial product that is quick and convenient to process. The entire process of application and disbursement completes within 24 to 36 hours. A steady job and a good income is your gateway to a smooth process. The booming lending business in India is an indicator of its popularity, especially among salaried individuals. These are some points to remember while applying for it:

1. Select lenders carefully: It is safer to explore the options in the market instead of sticking to the one offered by your bank. An aggregator site provides you with the relevant information. Moreover, there are seasonal and festive offers on a Personal Loan for salaried and self-employed individuals for a better deal. Patience and research yield excellent results and an economic offer.
   
   
2. Calculate the interest: Learn to calculate the actual Personal Loan rates. When you repay it in EMIs, calculate the interest on a reducing balance basis. You should know the amount you are going to pay in advance. Select between flat and reducing interest rates depending upon your affordability.
   
   
3. Check the charges: When you select the bank for borrowing the money, ensure you check all the charges. Every lender charges 2% of the loan amount as processing fees. Every charge you pay adds to the borrowing cost. Consider it before signing the agreement and reading the eligibility for Personal Loan.
   
   
4. Check affordability: Use the EMI calculator to check the Loan equated monthly instalment amount payable till the end of the tenure. It consists of the interest and part of the principal amount. The sum of principal amount and interest gets divided by the term. The interest component is larger during the initial months and gradually reduces towards the end of the tenure. Research the offers from different lenders available online for better knowledge.
   
   
5. Use the calculator: Before applying for an Instant Loan for self-employed individuals, use the calculator. Play around with combinations of the amount, interest, and tenure to see the optimal and affordable instalment amount. It should not exceed your budget or repayment capacity. Keep a longer term to pay lower instalments.
   
   
6. Confirm the foreclosure clause: Usually, the Loan is valid throughout the tenure when applying from the Banking app. Any foreclosure attracts prepayment penalty charges. Check and confirm the foreclosure clause before signing the agreement.