KNOW BEFORE TAKING PERSONAL LOAN A Personal loan is taken by an Individual to fulfill his/her personal needs. Repayment can be done through fixed EMI over a fixed term. No guarantor or co-applicant is required.
What Term Period will be suitable for my needs? Most of the personal loans come with a flexible term horizon. That means you can decide upfront when you want to pay back the loan amount. Regardless, the clearer you are about how long you will need the money for can help in avoiding loan default situation. Say, you’re borrowing for a foreign vacation with your spouse; an ideal term period for the loan can be around 4 months to a year.
How will the interest rate be calculated? Some Personal Loans have a static periodical interest rate, while others vary according to a certain aspect of the money market situation. It is advisable to know exactly how much interest will be levied on the loan amount you borrow, or the upper and lower limits of the dynamic interest rate, so as to remain on the safe side. It is also important to know on what basis/period time the interest gets levied on the loan amount.
How much would my initial monthly payments be? Sometimes, you can schedule your repayment procedure according to your needs/capacity. Paying off your loans early can easily reduce your outstanding amount’s interest (like a flexible EMI plan). It is advisable to be informed about how soon you can start repaying your loan back, as it may save fund leakage in case your loan amount cannot be fully utilized.
Will there be any Pre-payment charges? If you’re going to apply for a Bank Loan, it is helpful to know beforehand if there will be any prepayment fees charged. When you set a term period of loan with a bank, you are usually expected to adhere to it. Most banks favor it if you don’t pay your loan back in advance, because you will be paying interest on a loan for a shorter term. It is a loss for the Bank, and such situations usually charge the borrower a penalty.
Here's the things to know before getting a personal loan Only at CapitaWorld!
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