The Cheapest Way To Finance

image

In the case of Gold loans, if you, for some reason are unable to pay the loan for 3 months straight, your Gold would be sold to compensate for their money. In case of other secured loans, you can loan only up to the amount of your security like for example in case of loans against the FDA you can get money up to a certain portion of your FD and in case of loans against insurance, you can get an amount only up to the premium yet to be paid. Other loans such as home loans can only be used for things related to the house. When we talk about loans that are independent of any collateral, personal loans are the cheapest loans products out there.

Let us see how;

1) Interest Rates: when we talk about other unsecured loan products, like credit cards their interest can go up to 40 per cent! When we talk about personal loans, their interest rates can be as low as 14 per cent! To get the best deals on personal loans, compare thoroughly among different lenders such as SBI, Muthoot Finance, HDFC and check their EMI payouts using their EMI calculator tools such as HDFC personal loan EMI calculator.

2) Processing fees: Their processing can go up to 5 per cent but can be reduced by negotiation with the lender. Moreover, if you have a good relationship with a lender, you can without negotiations be offered a lower interest rate.

3) Penalty: When we talk about the penalties of a credit card, they can be exorbitant. And credit card payments are very strict and even a delay of a single day can lead to a high charge, people often forget to pay credit card fees and then keep on piling it up, but personal loans can be paid using bullet repayment scheme also, in which you just have to pay the interest every month but the principal can be paid at the end of the tenure that is at the time of maturity. For calculating these, you can also use EMI calculator personal loan. This will help you to have a clear idea of the amount you would be required to pay once you take the loan.

4) Time-efficient: Time is money. This phrase can be used to explain this point perfectly. Personal loans can be disbursed within minutes as per claims by a lot of lenders these days. On average, it takes up to 4 hours and can be processed even early if you provide a guarantor. In the case of a credit card loan, you need to have a credit card first, and that requires time, you cannot just walk into your bank and ask for a credit card, the process is time-consuming. At this point, personal loans come in handy.

5) Easy repayment: The lesser time you choose for repayment, the more money you save. In personal loans, you have full control over the time you want to repay the loan. You can select a short time duration to save money and you can choose a longer period for lower monthly payments.

Besides this, Personal loans can also help you in increasing your CIBIL score. CIBIL score is out of 900. It is made up of elements such as repayment, credit utilisation, hard enquiries, etc. The major portion is decided by the repayments which are 35 percent of the total score. Therefore, if you pay your EMIs on time, you would increase your credit score.

Personal loans also help in the credit mix. Credit mix is a badge that would be added to your credit report which would signify that you have the experience of handling e than one type of loan product. So in the past, if you had taken a credit card loan or secured loan, you would be able to earn a credit mix badge and it would make it easier for you to avail any loan in future.

Comments