Facing A Financial Crunch? Five Steps To Get An Easy Personal Loan
Need extra money to pay those long-pending credit card dues
? Running short of cash for the new house you are planning to buy? The best option for such last-minute financial
crunches or emergencies at home is a personal loan.
Personal loan is the quickest way you can borrow money without any collateral or security. The paperwork involved in getting such a loan is minimal. And less documentation means
the whole process of acquiring the loan is that much quicker.
While a personal loan may be easily available, it wouldnt hurt to look around for the best options. To get the best personal loan, you need to note a few things that banks
offer you. Take a look at a few dos and donts while seeking personal finance.
1. Think beyond the rate: Before applying for a personal loan, many people look at options such as fixed or variable interest rates. One thing they dont look at is the total
amount repayable (TAR). The advantage here is that the TAR figure will give you a more accurate picture -- the actual cost of your personal loan over the tenure of the credit
agreement (inclusive of interest charges and/or any additional fees).
Check if your bank is offering you a compulsory repayment holiday on your personal loan. This 'holiday means that you have to wait for, say, two or three months before making
repayments. If yes, then think twice before signing on the dotted line, as by not repaying your loan for a certain period, your personal loan will accumulate interest, costing
you more in the long run.
2. Keep your options open: Just because you are applying for personal loan to tide over a cash crunch doesnt mean that you will always be in the same position. So always keep
the pre-payment option open. Many loan providers put on extra charges when you pay off the debt early, while some might not charge you anything at all. Always check with
different banks for the best personal loan suitable for you.
3. Use your existing relationships for discounts on lending rates: Though its not mandatory to hold an account with the bank to get a personal loan, it will certainly help if
you do have an account. Banks often consider lower interest rates while offering personal loans to their existing customers. Therefore, its always a good idea to ask about
preferred interest rates, if any. If you have a corporate salary account, check if you can get lower rates.
4. You can always negotiate: The personal loan rates that banks offer are not writ in stone. Even if you are not an existing customer of the bank, you can try negotiating on the
interest rates offered. If your credit history is good, you may be lucky enough to get a good deal.
5. Understand the fine print: You should read the fine print and all the terms and conditions mentioned in the banks personal loan document before signing on the dotted line.
Dont hesitate to ask if you have doubts about any of the terms and conditions. Its always better to be safe than sorry.
If you feel that your bank or non-banking finance company (NBFC) has been imposing extra charges not mentioned in the terms and conditions, you can always approach the
respective regulators with your grievances. In case of banks, you can report to the Banking Ombudsman of your state, appointed by the Reserve Bank of India (RBI). In case of
NBFCs, you can report to the Department of Non Banking Supervision at the local RBI office.
by: nehasharma
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