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6things to be acknowledged while going in for personal loans

Arranging for a child’s tuition fee, planning holidays or eyeing new appliances will now become very easy through the provision of easy loans. Taking personal loans to bring stability back into life, where you might not have anything as a collateral security, personal loans are the best supporting options. This type of special loan can be procured without a guarantor or security.

But before signing the name and getting the loan agreement finalized, there are several points of considerations which one should know-

  • Loan amountBefore going in for a personal loan,the first thing to consideris the amount of money that is needed. Every bank has a different policy through which they have fixed their maximum and minimum loan amounts. On the other hand, the banks also consider factors like the income and the capability to repay the loan. Thus, deciding upon the amount will make it easier to go to the right bank for the fulfillment of loan needs.
  • The rate of interest-Next thing to be concerned while taking a personal loan is the rate of interest charged on the loan. All banks have different criteria of calculating their interest like the maybank housing loan, which differs from the others. Finding the rates charged by the bank and making a comparison will get the right picture of the bank and approaching the right bank.
  • Repayment tenure-There is no doubt that personal loans come with pitfalls. But the bank with good repayment tenure is the best suitable for the one in need of the loan. Sometimes the tenure of repaying the loan amount depends upon the business and the profession of the borrower.
  • Penalty-The repayment of bank loans is done in the form of post-dated personal checks signed by the borrower. The monthly EMIs are repaid by the borrower depending upon the payment criteria. If the borrower wants to repay the loan amount before the completion of the period, a pre-penalty will be levied on him as the penalty clause by the bank.
  • Additional fees-When a loan is passed, it comes along with several fees or charges like the processing fee, documentation charges, administration charges, etc. One must have full knowledge about these fees so that the bank does not charge any exorbitant amount in terms of fees and charges.
  • Bank relationship-Having old relationships with the bank might help the borrower in getting the good rate of interest that is lower as compared to the others. This is only done fractionally like the maybank personal loan or the special clients, who had their accounts in the same bank for several long years. Similarly, the salaried account people having with the bank can get lower ROI on their personal loan benefiting a lot.

In addition to these, the borrower must be aware of other important terms like loan switching, etc. for the benefits that can be taken by him in the near future. Such loans must be taken only in case of an urgent necessity otherwise; it will be a wasteful expense.