In today’s world, Personal Loans are very easy to avail. You can easily avail personal loan when you require urgent money for emergencies. It can help you take gain over your financial needs. In these days, it’s very usual to find email per day or receive marketing call about personal loan.

Like Home Loan which is usually secured loans, Personal loans are unsecured in nature that means banks and institutions have higher risk on these types of loans that’s why they offer personal loan at quite higher rate of interest as compare with some other type of loans i.e home or car loan.

Due to its unsecured nature, Personal Loan which can come in very handy easily during the time of emergencies or most requirement of cash. With the help of these you can easily met or fulfill your financial requirements. But due to higher competition among different banks / institutions, usually you receive a call or marketing email pertaining that the offer or interest rates are specially customized for you. I seriously advise that don’t fall in trap in such lucrative proposals from banks.

However, here are few points which every borrower must ask or think before avail for Personal Loan:-

  1. Fixed Interest Rate or Floating Interest Rate

As the name defined itself, Fixed Interest Rates do not change during the period of loan whereas Floating Interest Rates are likely to change depending upon the lending rates of banks and current market situation. Usually Fixed Interest are offered at lower interest rate as compare with Floating Interest Rate. But it doesn’t mean that you are going to pay less. And Floating Interest Rates vary from time to time. It may go down and reduce your number of EMI’s and vice versa. So, as a borrower you must think this point very clearly and take decision as per your financial need and risk taking ability.

  1. Other Costs associated with Personal Loan

While taken personal loan, Interest rates are not only the factor. There are other costs also which are usually associated with personal loan.

Processing Fee – Usually banks charges 1-2 % of the loan sanction amount as processing fee. Some banks charges lower processing fee and some may charge higher depending upon loan amount and duration. We advise, lower processing fee is always better option.

Prepayment Fee – Usually you take loan for met your financial requirement for short period. In between this period you may have more inflow of cash and try to prepayment of loan and want to save interest rates. But usually banks charges prepayment fee for keep the borrower in entire loan period and pay full interest. We advise, always consider lower prepayment fee.

Late Payment Fee – Banks levy penalty or late payment fee in case you are late on EMI payment. It may vary from bank to bank. Some charge less and some charge high. We never recommend you to consider loan with lower late payment fee. Because late payment will always put bad impact on your credit score/CIBIL score. We advise, always pay your EMI on time.

  1. Consider your need first and not Eligibility

Usually banks offer you more loan amount depending on your Eligibility. For example if you require only 1 Lac of rupees for met your urgent financial need. But banks executive may offer you pretty higher amount of loan depending upon your eligibility and pressurizes you to take such higher amount of loan as you are eligible for that. It may be 2 or 3 lac of rupee or even more instead of your actual requirement of money. Always remember that Personal Loans are unsecured loans and have higher interest rates. So why you pay interest for that amount which you actually don’t required. We advise always consider your need first and not your eligibility.

  1. Compare Interest Rates before Apply for Personal Loan

Most of the borrower get easily trap in lucrative offers on personal loan by different banks and never go in process for checking the interest rates offer by other banks. So usually it seems that after taking loan borrower may found some better option with other banks. So we advise always compare loan interest rates and other charges between different banks before apply. Borrower can also compare here INTEREST RATES ON PERSONAL LOAN.

  1. Must avoid any other Lucrative Add-on offer by Bank

Most of the time banks may offer some add-on schemes along with Personal Loan like insurance or credit cards. You always hear for bank that you not pay any upfront money for that and if there any insurance premium or fee for credit card it will directly added in your EMI. You have to say NO for such types of offers. Because nobody wants to pay interest on other Add-on offers. Yes, you read right, because any such premium of fee is directly added in your loan amount and you have to pay interest on these Add-on offers also. So we advise never take any add-on offer along with personal loan.

  1. Avoid Personal Loan for every situation

Last but not least always avoid personal loan unless you require it most. First always try to connect with your friends or family for any such type of loan. Because with the help of family and friends you get loan amount without any interest rate. And you have to pay only principle amount not interest. Usually people take personal loan from banks for their lavish lifestyle without considering the actual need of loan. People can take personal loans for their foreign holidays or for latest gadgets. We never recommend this and always say that People should avoid personal loan until they require at most.

  1. Conclusion

At last we only recommend that avoid personal loan until you require urgent need of cash for met your financial needs. Always consider above mentioned points and also read terms and condition before apply for personal loan. Never believe on any such marketing calls or emails regarding lucrative offers of personal loan. Think and apply your mind on all these offers and also compare interest rates among different banks before apply.

If you still have any confusion or require some additional information you simply write to us at

Leave a Reply


Required fields are marked *