Winning Bizness Desk
Mumbai. In this era of electronic revolution, taking out a loan has become very easy today. According to your various needs, banking and financial institutions are ready to give you a personal loan in just a short period of time. In such a situation, you should ask yourself some questions before taking a loan. This can save you from falling into the debt trap. Let us know which are the questions that you should ask yourself.
Why need a loan?
Personal loans can be taken to meet a variety of personal needs. These personal shares are easily available without any collateral. Apart from personal needs, salaried employees can also take it to build or strengthen their credit score. Before taking a personal loan, you should know why you have taken this loan.
How much loan is needed?
Before taking a loan, keep in mind that take as much loan as you need. Many a times, you can easily get more loan than you need, which can be quite lucrative. But keep in mind that you have to repay this personal loan with interest and if you default on it, it will adversely affect your credit score. The most important rule of taking a loan is that the total EMI of all your loans should not exceed 40 percent of your monthly salary.
Take a loan for how many years?
While taking a personal loan, also keep in mind the tenure for which you want to take the loan. Taking a loan for a longer tenure means that your EMI amount will come down. But for this you have to repay the loan during the entire tenure. Determine the personal loan tenure as per your requirement.
What are the interest rates and other charges?
You should borrow from a financier who has an easy lending process and offers the most reasonable rate of interest. But while you are doing so, do pay attention to other charges like processing fee, late payment charges and prepayment penalties. With a little research, you can find a better option for you.
Where to borrow?
In today's time, there are many options of banks and NBFCs for personal loans. You can choose any of these options as per your convenience. This decision depends on the interest rate, other charges, convenience fee, processing fee etc.