Monday, November 26, 2012

THINGS TO TAKE CARE BEFORE TAKING PERSONAL LOAN ..

  You should do a complete and detailed market survey of the various options like the interest rates they offer, the pre-payment charges they levy, terms and conditions.


2.    Interest rates are the most critical of all the costs that you pay. Therefore you should go for the cheapest option. Beware of banking terms like flat personal loan interest ratesthat appear to be cheaper but are in fact the most expensive. For example a 7% flat rate would come out to an effective cost of around 13%. Therefore its better to choose a monthly reducing balance option than a half-yearly reducing option or flat-rate option. This means lower effective cost for the same stated interest rate. Interest-free loans are sometimes too good to be true but view them with suspicion.


3.    There will also be other costs such as processing charges. You should try to negotiate on the processing fees and go for the least option available. Make sure you work out as to how much these other costs add up to. So even though the interest rate may be lower, it usually adds up to being expensive.


4.    Usually the EMIs may come out a lot more than what you can afford on a monthly basis. But keep in mind that you should know that lower tenure will reduce the loan amount and lower loan amount will reduce the tenure.


5.    Make sure that all deals and offers agreed upon are supported by relevant papers. So make sure you always ask for a letter in a banks letter-head mentioning the likes of, exact rate of interests, processing fees, pre-payment charges along with interest-schedule. Also before signing the documents, make sure you recheck all terms and conditions.


6.    Do not give any cheque, cash as processing fee to any Bank, Dsa employee. No Bank authorizes any cash or processing fee collection before the loan. They will deduct processing fee from your loan amount only.


7.    Do not sign any blank documents. Even if it takes you a few hours to fill-up the form, please do so. Do not leave anything for the executive to fill-up.
When you give documents to any associate, check his employee id or card etc.This will ensure your documents are not handed over to a broker etc.



Check whether he is associated with the bank for which you give documents to.
to agents who say they can get it done from multiple banks.