When applying for a Personal Loan
A Personal Loan is often the most convenient way to raise money whatever be the purpose of using money. Before you apply, you may want to keep in mind the following 4 factors:
Check if you can provide any security
A loan secured against your jewellery or against securities such as Mutual Fund units, listed shares of major companies, debentures of major companies/public sector companies, life insurance policies with large surrender values, National savings certificates, etc. can often be quicker and cheaper.
Get your own credit report
Apply online at CIBIL.com and follow the instruction given there to get a copy of your own credit report. Check your credit report thoroughly to spot errors. If need be, use our advisory services on CIBIL Report to get any errors corrected. Remember any errors in your credit report can reduce your chances of getting a good personal loan offer.
Go for Fixed rates of interest
Most personal loans are available at completely fixed rates of interest for the entire tenure. Make sure that the personal loan that you are taking is also fixed for the entire tenure of the loan.
Be aware about the Processing fees and Pre-payment Charges
Most personal loans have processing fees ranging from 0.50% to 3% of the loan amount . Most personal loans will also charge you a fee if you wish to pre-pay the loan of between 3-5% of the loan amount repaid. Some lenders will not allow pre-payment for the first 6 months and most lenders do not accept partial pre-payment.
Do not sign blank application forms or documents and keep a copy of all documents submitted to the lender for your future reference. Any promise made by the DSA or even an official of the lender has no value unless it is in writing or at least on email.
So if you are basing your decision on any such promise make sure you get it in record in some form.