7 Things to remember before taking a Loan

Points to keep in mind before taking a Loan

Things to remember before taking a Loan.

Most of the people take loan to buy home, cars, bikes and many other things. But have we given any thought to what loan is meant for us? Is it going to pressure our lives or going to eat away our hard earned money. To day we are going to tell you “ What to keep in mind before taking a Loan”.

Terms and Conditions: Whenever we see any advertisement of banks, it looks very attractive, showing so many schemes of low interest rates but a * (star) attached with it. Yes, that small star matters a lot. One should read terms and conditions of the bank carefully. Compare these terms with other banks or loan providers. Always keep in mind that these fine lines of T & C have greater impacts on your loan and its payments.

Cheap Loans and Processing Fees: We see advertisements of Cheaper loans but when we go for loan, they ask us for processing fees as well. So, what we have saved from cheaper loans goes to the processing fees. It is better to see give a great look at the processing fees as well.

Compare Interest Rates: Earlier we did not have access to all banks to compare interest rates, but these days things have become very easy and we can get these information in our drawing rooms. Visit websites of banks and lenders, compare interest rates and take your decision.

Bargain for Lower Interest Rates: Yes, Bargaining is also available in finance market as well. If you have details of many lenders and their interest rates, you can bargain for a better deal as agents get higher commission to charge you higher interest rates. These deals are always there. You can bargain with private banks easily compare to Public Sector Banks.

EMIs : EMI is also important, as you will pay out of your monthly income, EMI of Loan should not more than your monthly income. It should be around 30% of your monthly income.

Loan for Consumer Goods: One should try to avoid loan for consumer goods. Loan for TV, AC, Refrigerator etc. are not good in our point of view as they put burden on you.  Try to buy these things when you have some extra money.

Personal Loan For Emergency Only: DO not take personal loans for lifestyle maintenance. Keep personal Loan Option for emergency only. Personal Loans have very high Interest rates Compare to other financial products. So, it is advisable to stay away from it unless you have no other option.