With the increasing cost of living in Pune, people in the city opt to take a personal loan to cater to a plethora of requirements. Since a personal loan is an unsecured form of credit, salaried professionals in Pune can opt for this type of loan without having to pledge any of their assets as collateral. Moreover, this type of loan can be utilized to cater to pay off credit card bills, fund your vacation or even medical expenses. This type of loan can be availed for a tenure of 12 months-60 months at low-interest rates. However, when opting for a personal loan you must follow the below tips to choose the best lender according to your needs.
First, let’s understand what a personal loan is?
A personal loan is an unsecured form of credit that is offered without any security and is given based on your credit eligibility i.e. your credit score, income, age, employment and other factors. Getting a personal loan is a convenient way to take care of your financial crisis without landing in a debt trap. This type of loan can be availed by making an easy online application through the lender’s website or mobile application. The loan amount can be utilized for taking care of various financial needs including payment of medical expenses, travel expenses, home renovation and other purposes.
Why take a personal loan in Pune?
Given below are few reasons as to why you should apply for a personal loan in pune
- Travel purpose
- Pay for vehicle repairs
- Pay down payment for buying a bike or a car
- Home renovation
- Starting a new business
- For marriage in the family
- Pay off credit card debt
- Debt consolidation
To ensure taking a personal loan is viable for you, you should follow the below personal loan tips to avoid falling into any financial trap:
Compare personal loan rates online: It is a usual human tendency to look for options when shopping around. Likewise, even when looking for personal loans online, it is advisable to compare interest rates online. When checking interest rates, ensure that you compare rates offered by banks, NBFCs as well as online lenders. Also, understand that with every loan application that you make, your credit score takes a hit. So, apply only when you are sure that you meet the lender’s eligibility criteria. All lenders in India have different interest rates starting from 10.75% to 24%. For instance, if you avail personal loan of Rs. 4 lakhs at an interest rate of 12% then the EMI amount would be 8, 898 whereas if you avail the same loan amount at an interest rate of 20% then the EMI would be Rs. 10,958.
Check on the loan amount: Depending on your personal loan needs, choose a lender that offers you a loan amount that helps you cater to your personal finance needs. Though it is always a good idea to choose a lender offering a high loan amount, it is equally important you note down the interest rate as well as the high-interest rate will increase the overall loan amount. If not a personal loan, then you can also opt for a Flexi personal loan that allows you to pay interest only EMI and then repay the loan amount at the end of the tenure.
Opt for an EMI amount you can pay: Before you take a personal loan, ensure that you opt for an EMI amount you would be able to repay. This is an important tip to follow as not opting for a suitable EMI amount would lead to loan default which would attract penalty and also would decrease your credit score. Also check on late payment charges, foreclosure charges, interest rate and tenure to ensure you make the right pick. Ensure that your EMI outflow is not more than 50% of your monthly income. For example, if your monthly income is Rs. 50,000 then all your EMIs should not exceed more than Rs. 25,000.
Check on the processing fee: Lenders in Pune charge loan processing fee ranging from 2%-3% exclusive of GST. The fee is deducted from the total loan amount disbursed to the borrower. Therefore, before applying for a loan always check on this as a high processing fee can turn out to be a costly affair for you.
Check on foreclosure charges and other penalties: If you think that you are likely to repay the loan before the end of the tenure then you must check on the foreclosure charges. Few lenders levy high foreclosure charges as they lose on the interest charged towards the whole tenure. Also, few lenders don’t allow you to close the loan before 6-12 months. So, it is always wise to check on the foreclosure charges before applying for personal loan in Pune with any particular lender.