Top News

Personal Loan: Today, a personal loan has become an important financial tool, which you can use for business, travel, or any other personal work. It is important to ask questions of the bank before taking a loan. This will ensure that you get a loan at an affordable interest rate and also reduce the risk of getting trapped in debt.

Fixed or floating interest rate?

It is important to know the interest rate (fixed or floating) before taking a personal loan. Fixed interest rate remains the same throughout the loan period, while floating interest rate changes when RBI changes the repo rate. This affects your monthly payment, so choose the right option according to your financial situation.

The biggest advantage of a floating interest rate is that if the repo rate decreases, the interest rate decreases. On the other hand, the interest rate increases when the repo rate increases. On the other hand, market fluctuations do not affect fixed interest, it remains the same throughout the loan period.

Loan tenure -
Ask your lender about the loan tenure options available, and what is the maximum and minimum tenure for repaying the loan? Personal loans come with different loan terms, ranging from a few months to several years. Taking a loan for a longer period means that your EMI amount will be lower. But for this, you will have to repay the loan over the entire tenure.

Fees -
In addition to the interest rate, personal loans may include several other charges such as processing fees, prepayment penalties, and late payment charges. It is important to understand all these charges before taking a loan.

Is the loan secured or unsecured?
Determine whether the loan is secured or unsecured. Secured loans may have lower interest rates, but there may also be a risk of losing your collateral if you default. Unsecured loans usually have higher interest rates but do not require collateral.

Loan Prepayment-
Many banks and NBFCs levy prepayment charges on the prepayment of personal loans. If you are planning to close the loan early, check with the bank about the prepayment penalty, pre-closure process and charges beforehand. This will help you avoid additional costs.

Disclaimer: This content has been sourced and edited from Hr Breaking. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.