Here are some essentials information you need before taking a personal loan
A Good credit score : A credit score represents your creditworthiness based on your history of credit repayment your credit score should be more than 750. A credit score can range between 300 to 900. 750 or more than that can be said as a good credit score. Less credit scores are considered as bad management and it can result in getting your ICICI personal loan application rejected. Maintaining a good credit score is easier than you think. You just need to pay your dues on time instead of using multiple credit cards. You can just use one credit card with a good credit history.
Personal loan Interest rate : You must check interest rates provided by all banks and any other lenders as the interest rate of each bank is different from the other and after getting all the information you must compare and calculate the prices and consider which price is the lowest and what type of interest suits you better and improve your repayments.
Evaluate yourself : You must evaluate yourself before borrowing a personal loan from any bank.Whether you are capable of borrowing a loan or not depends on your evaluation. You need to make sure you have enough income for your repayments. Calculating your monthly EMI in advance will be helpful.
Floating rate of interest : When you borrow a loan based on floating rate of interest it makes your interest seem low but it can increase in future.
Scams : Many lenders in the market will offer you a plan with low interest or it might be a gimmick scheme but when you borrow a loan you realize these plans are actually more expensive. So, you must have good knowledge and understanding before applying for a personal loan or you might fall into their trap.
Consider every cost : Before applying for a personal loan, you must consider all cost that’s included in a personal loan as there are multiple fees like:
Processing fee : Processing fee is a one-time charge that should be paid by a personal loan borrower to the Bank or NBFC If a bank gives you low interest but the processing fee is higher than the amount you will receive will be much lesser than the amount you applied for.
Prepayment penalty : Prepayment penalty is a fee that you will have to pay to the bank if you pay off all or part of your debt early
And late fee : Late fee is also known as overdue fine it is a charge fined by the Bank or NBFC to the borrower if they fail to pay their dues in time
Consider all these fees as it can affect your loan. If a bank gives you low interest but the processing fee is higher than the amount you will receive will be much lesser than the amount you applied for.
There are a lot of banks in India that Provide personal loans with different interest rates. Personal loan interest rate is 10.5 to 19%.
You can compare other banks with ICICI and choose one which would be best for you in terms of interest as well as repayment.
Read the terms : Many people ignore reading terms and condition as it is lengthy but reading those terms and condition plays a vital role it can help you get the benefit and it can also help you from getting in traps and scams so go through all the guidelines before borrowing the loan.
Personal loan should be avoided If there are no emergencies as mentioned above personal loan can be a problem as there will be more interest rate, more processing fee prepayment fee and the late. If you calculate these small amounts it can turn into a big amount and empty your pockets
Also Read:- Six Things To Consider Before Opting For A Personal Loan