New Delhi7 hours ago
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Many people turn to personal loans when they need money. Through this, you can arrange money in case of sudden need. In this you do not need to mortgage any property. However, before applying for a personal loan, you should consider several aspects like your CIBIL score and how much loan to take. We are telling you about 6 such things that you should keep in mind before applying for a personal loan.
Don’t Borrow More Than You Need
Accurately calculate your need Take only as much loan as you need. It is seen many times that you are eligible for a higher loan amount than the amount you need. In such a situation, many people take more loans than necessary. Borrowing too much has an impact on your financial goals. Apart from this, if you are not able to repay the loan on time, then you also have to pay a fine. Not only this, it also spoils your CIBIL score. Due to which you may find it difficult to get a loan in future.
Find out about interest rates
Before applying for a personal loan anywhere, you should know about its interest rates. Pay attention to the interest rates of all banks and NBFCs and apply where the loan is available at low interest. Apart from this, you can also find out about pre-approved loans in the bank where you have an account. Many times banks also provide pre-approved loan facility to their customers. These banks are giving loans at low interest rates.
|Bank||Interest Rate (in %)|
|Bank Of Baroda||10.00|
check cibil score
If you have a good credit score or CIBIL score, then you can get the benefit of this in a personal loan. A good CIBIL score can reduce your processing fee and interest rate. Usually, banks also reduce the interest apart from waiving the processing fee of the customer with a better credit score. A CIBIL score between 750-900 is considered good. On the other hand, if it is less than 750, you will get a loan at a higher interest rate. Apart from this, you may also face difficulty in getting the loan. That’s why take care of your credit score.
See also processing fee and other charges
Often banks include some hidden charges and processing fees in personal loans, which the bankers or agents avoid to disclose to the customer while giving the loan. Apart from this, also find out the charges to be levied on pre-payment closure of the loan. With this you will not face any problem later.
Keep in mind the repayment capacity
One should think carefully before choosing the loan tenure. Loan installments should be decided by looking at your capacity. Because if you are unable to pay the installment, you will have to pay a penalty, apart from this, it will also have a bad effect on your CIBIL score. One should try to settle the loan as soon as possible.
Take loan from concerned bank
If you are thinking of taking a loan, then take a loan from the same bank where you are taking your account, fixed deposit or credit card service from there. Because banks provide loans to their regular customers easily and at reasonable interest rates.
No tax to be paid on personal loan
Personal loan is not taxed as the loan amount is not considered as income, but make sure that you have taken the loan from a legal source such as a bank or NBFC. However, to avail the tax exemption on the loan, you will need to show several documents. These include documents like expenditure voucher, bank certificate, sanction letter and auditor’s letter etc.