Availing a loan is quite easy these days. Virtually every bank in India is offering one loan scheme or the other to woo customers. But, from a customer point of view, choosing a loan scheme from the many can be a daunting task. This article talks about few aspects that every loan seeker must consider first before signing any loan agreement.
* The loan you may eventually qualify for has a direct bearing on the salary/income you draw annually. If it is low, try applying for a loan with your spouse or parents.
* If possible, always go for a loan scheme whose interest rates are calculated on a monthly reducing basis than a yearly reducing basis. Whichever way you analyze, the former method is always profitable for the borrower. Else, you'll end up paying more.
* Public sector banks have a lesser interest rates than private banks. In the case of some loan schemes, this difference is quite palpable.
* Always make it a point to check the prepayment fine. This is important especially if the loan you are applying for is a 15 or 20 year period (say).
* Keep an eye on the processing fee charged by the bank. Even if the bank says that they charge only a nominal processing fee of 2%, for a loan of 10,00,000, that will amount to 20,000, which is not at all a small sum in any counts. When you see such 'nominal' offers, set your mind calculator to do some simple calculations before proceeding further.
* If an insurance cover comes along with a loan scheme, you can go for it.
* Finally, make it a point to read and understand the terms and conditions, its various clauses and sub clauses. Understanding the fine print helps you to realize whether you really benefits or not from a particular offer.
