Personal loans can help you take care of your personal financial needs. These include advance courses, medical emergency, wedding, renovation, vacation, and more. However, before signing on the dotted lines, make sure of certain things.
The interest amount, tenor, interest rates should match with what you discussed with the lender. The personal loan emi calculator which you used to calculate the EMIs are indicative in nature. Before putting your signature, know what your actual EMIs would be.
Additional Read: Know All the Features and Benefits of Your Bajaj Finserv Personal Loan
The flexi personal loan offers multiple withdrawals. In flexi loan, the loan limit decreases every time you withdraw, but the loan limit does not increase when the principal is repaid. In flexi interest-only the loan limit increases when the principal is repaid. You need to be sure that there is no limiting clause for the option that you have chosen.
Fees and Taxes
You need to read the fine print to know all the fees, and add-on charges, so that there are no costs hidden from your knowledge. The loan document lists general terms, and conditions. Peruse the stamp duty, taxes, part pre-payment charges, and penalty to understand your total costs.
Tenor of The Loan
Before taking the final plunge, revisit the tenor of the loan. A longer tenor may reduce your EMIs, but it increases your total interest payable.
For example: You withdraw a loan amount of Rs. 1 lakh at 16% interest rate.
For a tenor of 12 months, the EMI is Rs. 9,073 but total interest to be paid is Rs. 8,875.
For a tenor of 24 months, the EMI is Rs. 4,896 but total interest to be paid is Rs. 17,513.
| Withdrawn Loan Amount of Rs. 1 Lakh At 16% Interest Rate |
| Tenor in months |
12 |
24 |
| Total Interest Payable |
Rs. 8,875 |
Rs.17,513 |
| EMIs |
Rs. 9,073 |
Rs.4,896 |
Table1. (These figures are indicative in nature. The real values will differ)
You need to check your monthly savings, and determine a tenor that is best suited for you. Long tenor makes the loan expensive.
You should be aware of the events of default, and the remedies available. Do not fail to provide all the required documents. Failure to provide accurate information, and documents is considered as one of the cases of default.
Once you are sure of all the aspects, you can confidently sign a personal loan agreement.
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