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Ahead of festive seasons, it is impossible to avoid the advertisements from lenders, offering loans for shopping and various other needs. Many await this opportunity to grab the best offer to buy a home, car, jewels, etc. at low interest rates. A loan is the best option when you do not have money to pay for things that are essential. However, before opting for a loan, take precautions to choose the right one.
Not only are loans getting cheaper, festive season is also the time when banks push their special loan offers. These loan offers are in the form of waiver of processing fees, discounted fees, and lower interest rates and so on.
Many prominent Financial Institutions and Banks offers no processing fee on Home Loans, Vehicles, Gold Loans, Business Loan and even Personal Loans during this Festive season.
These Festival Loans are basically a modification of Personal Loans with low-interest rates, faster processing time, and Low/No processing fees. In addition, most of the festival loans provide a long period of time of almost a year. However, the loans are of fewer amounts compared to personal loans, and the maximum loan offered is of Rs. 50,000.
You must fulfill the normal loan eligibility criteria for getting the loan, such as adequate income, work experience, age, etc. Festival loan can be availed jointly with your spouse as well. The eligibility norms to get the personal loan is quite stringent as you must fulfill the high-income criteria, whereas under the festive loan the income level required is comparatively very low, so people looking for a loan up to Rs 50,000 can easily get this loan.
The following are the eligibility criteria
While a low-interest rate regime is a good reason for you to take a home loan now, there are a few things to be kept in mind. Many of these festive offers often come with specific clauses such as a high credit score, profession of the borrower, up to a certain loan amount only, etc. Borrowers are required to go through the exact terms carefully before finalising.
A borrower should shop around for the best home loan interest rates and not make any decisions based on snazzy advertisements. Also, see if any further negotiations are possible. Currently, borrowers are in the driver’s seat as banks are competing heavily with each other for customers.
1. While selecting a Loan
One needs to be extra careful while selecting a loan as there can be various hidden charges related to the loan. Also, the benefits of festival loans differ from each bank. Therefore, it is best to make a fine comparison of each loan offer in a shortlisting process before finalizing one. It is also of immense importance that the borrower reads all the terms and conditions with utmost concentration and understanding to avoid future troubles.
2. Do not Over-Borrow
It is advisable to borrow only what is needed. Gifting is more about the emotions and relations that humans share; it’s celebrating the bonds but keeping healthy finance is also important for a person’s overall growth. Therefore, it’s always beneficial to consider the circumstances and then make a choice. One needs to keep in mind that loans need to be repaid, and there are interest rates and several other charges that come along with it.
3. Do not apply with multiple Lenders
Every loan you take gets recorded in your credit score and will be visible to every lender. Therefore, applying to multiple banks or financial institutions will lead to the rejection of all the applications and will leave a negative mark on your financial needs and future transactions with such lenders.
SBI Festival Loan
SBI’s festival loan can be availed by anyone who has minimum monthly income of Rs. 3000. Loan Amount: The amount that you can borrow as SBI Festival Loan depends on your income and repayment capacity. The minimum amount that can be borrowed with this scheme is Rs.5000/- and the maximum is four times your Net Monthly Income. This maximum amount that can be borrowed is subject to a ceiling of Rs.50,000/-.
Following are the details:
HDFC Bank Festive Treats
HDFC Bank has announced its tailor made product Festive Treats which lets you avail a loan for this festival purchase. You may choose an item to be purchased from the official website of the bank and apply for the loan. You can also avail discounts and cashbacks on each item upon purchase.
ICICI Bank Festival Delights Offers
Aligning with various brands and online shopping companies, ICICI Bank provides loans for festival shopping. The customers get guaranteed cashback on different items. Similarly, debit and credit card users get discounts on the purchase of products from the partnered stores and sites.
Festival is the time of exchanging gifts, buying new clothes, jewels and other accessories. It’s also the time that banks and other companies lure customers to sell all the products at attractive prices. Money saved in advance can save you the trouble of taking a loan. However, it’s not the case with all. A loan is the only way out for many to make the festival more merrier.
You can consider a festive loan if you are looking to buy high value products like home or car as several banks offer zero processing charges, and discount on the interest rate for applications submitted within festive period.
Your choice of loan should depend on the tenure for which you are seeking the loan and amount. Festival loan is currently available up to Rs 50,000 and the tenure allowed is up to 12 months. So, if your loan requirement is higher or if you are looking for higher repayment period, then a personal loan could be the best choice, else festival loan is a lucrative borrowing option.
It would be however wise not to go overboard with your shopping as a loan is a loan and it needs to be repaid. Borrow according to your repayment capacity to avoid any kind of debt trap.
Festival is a wonderful opportunity if you look forward to taking a big ticket loan. Many lenders announce rate cuts during festive season to woo more customers. With the banks lowering interest rates for individuals with good credit score, home loans and car loans can become cheaper for credit healthy individuals.