New Delhi: When people face financial difficulties, they often turn to banks. Personal loans from banks help people overcome these difficulties. Currently, banks approve personal loans easily, without much hassle. Bank apps, fintech platforms, and other platforms also offer personal loans.
When choosing a personal loan, people usually look at the interest rates. But did you know this can be a big mistake? Sometimes, personal loans can become a major burden. Every lender uses various methods to make money.
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Customers are often charged hefty fees in the name of processing fees or penalties. This causes financial losses for people. Therefore, along with interest rates, you should also pay attention to these factors, which can be very beneficial for you.
How much money will you actually receive?
When taking a personal loan, processing fees and other charges can reduce the amount you receive. Even if two lenders have similar EMIs and interest rates, some lenders deduct processing fees, insurance, or membership fees upfront. This results in less money being credited to your account. Therefore, it is essential to inquire about processing fees and other charges before taking a loan.
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Understand the prepayment rules.
When people receive a bonus or a lump sum of money, they often plan to pay off their loans completely. However, you may be charged a prepayment fee. In many cases, there is even a lock-in period. Therefore, it is crucial to find out about foreclosure charges before taking a personal loan. This will prevent you from facing any problems later on.
Penalties and charges
Sometimes, even people who pay their EMIs on time miss a payment due to bank errors or timing issues. In such situations, lenders impose very high penalty charges. This can cause significant financial losses for customers. Also, before taking out a personal loan, be sure to ask about the penalties and other charges that may apply for late payments or other defaults. Only consider a personal loan from a lender if all the information seems correct and transparent.