The following factors can help you in the process of taking a loan:
1. Ensure timely repayment:-
Never miss a loan EMI repayment. Your loan repayment should be discipline make sure you don’t miss the payment. Missing an EMI or delaying a payment are the key factors that can impact your credit score and reduces your chances of getting a loan in future.
2. Borrow as much as you can repay:-
Take a loan that you can easily repay. You monthly outgo of all you loan should not exceed 50% of your income. Ex. Your income is 80,000 your total EMI should not exceed 40,000.
3. Keep tenure short:-
The longer the tenure, the bigger is the interest burden on the borrower. The shorter the tenure the lower the interest. In a 10-year loan, the interest paid is 57% of the borrowed amount. If the tenure is 20 years the interest will raise to 128%.
4. Take Insurance for big ticket:-
Experts advise that big-ticket borrowers should take insurance cover equal to the loan.Also, insurance policies linked to a loan are typically single premium plans. But regular payment plans are the best way to insure yourself.
5. Switch lender for better rates:-
If another bank is offering a better rate, it makes sense to switch loans considering the processing fee it should at-least gain you 2%.
6. Understand terms:-
Some lenders are notorious for slipping in clauses that are loaded against the borrower. If you are unable to understand the legalese, get a financial advisor or chartered accountant to take a look at the agreement before you sign it. Yet, read the terms and conditions carefully to avoid unpleasant surprises.
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