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Personal Loan
A personal loan is an-all purpose loan for your own personal use. It could be for any expenses such as funding holidays, purchase of consumer durables, medical expenses, wedding expenses, buying jewelry, down-payment for a home loan, transfer of credit card outstanding, or sudden business requirement.
Personal Loan Features :
- Loans for salaried & self-employed individuals
- Special loans for doctors, chartered accountants, engineers, architects, company secretaries, and ICWAI graduates
- Loans are available from Rs. 20000 to Rs. 20 lakh for any purpose depending on your requirement
- Flexible repayment options, ranging from 12 to 60 months
- Hassle-free loans - No security/guarantor/collateral required
- Repay with easy EMIs
- Balance transfer facility to retire any higher cost debt
- Loans available against repayment track record of any existing auto, personal or home loan
- Loans available against proof of life insurance policy premium receipts
- Simple procedure, minimal documentation, & quick approval
1. Calculating the Rate of Interest :
The rate of interest is used as a selling factor for personal loans. These loans are pushed off with an annual interest rate of just 0.99% or 1.49%, which in reality is on a monthly basis. This rate calculated on a monthly basis leads up to an annual rate of 24-25%. For this purpose a person availing a personal loan should calculate the rate of interest for him to evaluate the extent of interest payable.
The impact on calculation of the interest rate on a flat basis is greater than that on the reducing balance. Although, the interest will on the flat rate basis will seems lower at the beginning, the end cost of this method will lead to a greater value than the reducing method due to the continuity of the same amount of interest throughout. With the reducing capital, the interest on the reducing balance will seemingly decrease.
In a nutshell, you need to do your arithmetic. You can use our wide range of Financial Calculators for this purpose.
2 .Need for a Loan :
There are numerous opportunities to avail a loan and financing institutions have spared no effort to push their services. This brings in a situation where an individual is made to believe that he or she requires a loan. With this mind frame people tend to take loans without assessing the necessity for it and think of ways to spend it after availing of it. One should always determine the cause for opting for a loan and get one only if there is an absolute necessary.
3. Extracting the Benefit :
Since a loan is there for the taking with the numerous offers, there is a tendency to avail of it and use it in an unproductive manner. While incurring expenses with a loan one should ensure that the benefit of availing a loan is extracted. If the loan is not spent for productive reasons it would lead to a situation of discomfort as the repayment of the loan is going to be coming for regular expenses of day-to-day life.
4.Repayment is a Must :
Availing loans is the primary thought of borrowers and the repayment is hardly taken into consideration. With these types of loans that yield high rates of interest, the borrower should set it as the priority to have it written off the book of dues at the earliest. An outstanding with this type of borrowing could swell the amount of interest to be paid.
Effective Management of a Personal Loan
- Check for the rate of interest and an alternative mode of repaying it with a lower interest value.
- Check for a facility wherein the loan amount can by paid off in bulk payments over several installments.
- Calculate the interest on the flat rate and reducing rate of interest to determine the real value of the loan.
- Ensure payment of all EMIs without skipping a single payment to avoid adding value to the already existing high rate of interest.
- Mark out all possible funds to clear off the loan and get rid of the high costs.
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