Cashkumar - Ten mistakes while applying for a personal loan
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Transcript of Cashkumar - Ten mistakes while applying for a personal loan
Cashkumar - https://cashkumar.com/personal-loan-bangalore
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To get the best deal for your personal loan requirement With regard to Rate of Interest
Tenure
Pre-closure, part payment, etc.
To ensure that we do not default/ delay payment unintentionally
To ensure we do not misread fine print
And many more
Cashkumar - https://cashkumar.com/personal-loan-bangalore 2
We will split the learning into 10 smaller slides
The ideas is to imbibe each point well before we move to the next point
We have got feedback from multiple people who have made one or more of the mistakes highlighted
Share your experience on any of the instances or mistakes made by you in the comments section below
Let us all learn together
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Don’t take the first offer that comes your way!
It might be an offer from the bank you hold existing relationship with
You might get a handout regarding the loan offer while you visit the mall
Or you might get a call from one of the financial institutions saying you have a pre-approved loan offer
No doubt you might get a loan through these channels but the probability of it being the best offer is very minuscule
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The interest rate and other fees will be offered to you based on your eligibility
Your eligibility will be based on several factors like your monthly take home, salaried/self-employed, company you work for, your current EMI commitment etc
Leverage technology to explore the best offer based on your eligibility and compare the offers from several banks with the help of platforms like Cashkumar
Just by entering few basic details and requirements, these platforms will give you the details of banks you are eligible for and the interest rates offered
This process is simple, saves your time and helps you grab a great deal!
Cashkumar - https://cashkumar.com/personal-loan-bangalore 5
Stop focusing only on Interest rate while you are shopping for the loan
Other than the interest rates, there are several charges applied by banks such as processing fees, pre-closure fee and so on while lending the loan.
Be aware of all the charges before accepting the offer as the chances of you going with the right offer is minuscule if you concentrate only on Interest rate
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Lets take an Ex:– You need personal loan for Rs. 5,00,000/-. Bank A is offering ROI -14.5%, processing fee - Rs. 999 & no pre-closure charges while Bank B is offering interest rate -14%, processing fee -2% & 3% and pre-closure fee of 5%.
If you are looking to pre-close the loan, Bank A will be the wise choice though the interest rate is slightly high.
If you are looking at complete tenure then Bank B makes sense. Therefore its not only the interest rate which matters!
You can visit Cashkumar to check the fees and rates offered by several banks.
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Have you ever wondered why lending institutions make you sign at dozens of places in the agreement?
So every signature of yours is primarily accepting some T&C highlighted in that section or page
There are several T&C under 4 main sections on the loan agreement and those sections are : The interpretation/definitions section
The mechanical section
The transaction-specific section
The boilerplate section
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These sections contain the details and T&C’s on the below important aspects of the loan:
DISBURSEMENT OF LOAN AMOUNT
CALCULATION AND PAYMENT OF INTEREST
REPAYMENT OF LOAN AMOUNT
SCHEDULE OF LOAN AMOUNT REPAYMENTS AND INTEREST PAYMENTS
PAYMENT OF AGREEMENT FEE
CALCULATION AND PAYMENT OF DEFAULT INTEREST
INSURANCE
OBLIGATIONS OF BORROWER
CANCELLATION OF LOAN AGREEMENT and
OTHER TERMS AND CONDITIONS
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Its very important to understand these T&C’s before you sign the agreement.
So do not just skim through the agreement with urgency to get done with the paper work
It would always help to go through the finer points to ensure there are no surprises on a later date.
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How often have you heard about customers defaulting loans because they don’t have the ability to repay loan?
This is because they miscalculate their potential of repaying a loan while borrowing
If you have a good credit history and eligible for a loan, several financial institutions will call you selling loans and offering you the higher loan amounts upto your maximum eligibility
Cashkumar - https://cashkumar.com/personal-loan-bangalore
While it is definitely good to know that your are eligible for higher loan amount and see money inflow to the account, you might want to consider your repayment abilities based on your personal commitments
Its very important to account your current personal commitments, other EMIs that you are paying etc before deciding on the loan amount
You can also use EMI calculator to check the monthly EMI you will have to pay on the loan and decide on the loan amount
Cashkumar - https://cashkumar.com/personal-loan-bangalore
Any delay in payment or default due to loan burden will hit your credit score badly and bring down your chances of getting further loans in future
Therefore don’t overboard your self and you can always take a top up loan if need be
Cashkumar - https://cashkumar.com/personal-loan-bangalore
Say you want a travel loan for 2lakhs, tenure 3 years to visit Dubai with your loved one
You are working with one of the top MNCs and earning 50k a month and for sure you know you will get a good bonus at year end as you have performed extremely well this year.
And you plan to pre-pay or part pay your loan with the bonus amount, which is a good option to get done with your liability.
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Cashkumar – Personal loan interest rates
When you approach bank to pre-pay the loan, they might reject this saying they don’t have pre-pay option or the cost of pre-payment is very high. This will end up being a great disappointment
Therefore when you are applying for a loan, its good to estimate your repaying capability by considering your incentives, bonus etc and more important to look for a bank who has pre-payment and part payment option with zero charges or lesser fees
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Cashkumar – Personal loan interest rates
Never miss this point in the application form in case you are looking for an early closure
Cashkumar clearly highlights all these parameters on the site which would help you take an informed decision
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Cashkumar – Personal loan interest rates
You are in a urgent need of cash and have applied for loan, you know that your loan will be rejected if you say that you are staying in a PG. You decide to give incorrect information to bank saying you are in rented house with family and try to get an fake rental agreement from your friend who rents a house and submit to bank.
If you are thinking this is a easy way out, it’s
a big NO NO!
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Never hide information or lie to the lender while borrowing
This could hurt your credit rating or lead to a legal case which sure is not worth the trouble.
You might not only be forced to repay the loan immediately but also be charged a hefty fine for this fraudulent act
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Its not ethical to borrow by hiding information or lying.
You can always check your eligibility through platforms like Cashkumar and check which institution will be happy to lend you based on your eligibility and apply accordingly.
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Credit score is a rating which indicates person’s credit worthiness and this is published by CIBIL based on person’s credit history.
The score ranges between 300 – 900, which is derived by CIBIL through statistical algorithms using individual’s credit history for atleast past six months which includes borrowings, repayment patterns, defaults in repayment and other data relevant to a person’s creditworthiness
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Its easy for a person with good credit score to get a loan, provided he meets the banks eligibility criteria.
If a customer has Bad credit score, applying for a loan would further hamper his Credit score due to the inquiry placed by the financial institutions
In India each loan request via a Bank or NBFC would take a hit of about 5 to 10 points on your CIBIL score (credit score).
Multiple rejects could hamper this further.
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It is also difficult to get a loan even if you don’t have a CIBIL score i.e. -1 or 0
It is always advisable to check your CIBIL score before applying for a loan and also ensure the same is rectified in case of any issues.
You can get your CIBIL scores and CIR online in official CIBIL website www.cibil.com.
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While investing is a good thing, taking a loan for risky investments might not be a good idea
Few customers take personal loan to make some risky investments in Equity markets or the likes
This can increase your returns when markets are rising but losses can be devastating when the markets fall.
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Below are few reasons how this can be risky
The income you receive from the investment may get lower than you expected
Interest rates on the loan could rise. If they rose by 2% or 4%, you might get in trouble
What if your income ceases due to sickness, injury or redundancy
The value of your investment may fall and the proceeds from the sale may not cover the remaining loan balance
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Therefore a wrong pick or change in the Macro or Micro Economics could take a toll on the investment and hence your loan.
Make sure you keep this in mind while borrowing.
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When the bank representative is sitting across you, please do not hesitate to clarify all your queries however silly they might sound to you
Not everyone will understand all the Terms and
conditions in the application, so its absolutely ok to clarify any doubts
There will be several sections in the T&C
regarding the Loan amount, Calculation and payment of interest, Repayment and several other fees, Insurance,Pre closure and part closure
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Make sure you understand all the details before signing the agreement
This will ensure that there are no assumptions which in turn avoid any surprises going forward
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Remember those signatures on the agreement reiterate the fact in multiple ways that you would not default. So put in your best efforts to ensure that you do not default or delay the EMI payment.
If you default or delay the payment on loan, this will drastically take down your credit score and chances of you getting further loan will be very less
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Hope these ten tips helped you and you will not make these mistakes while applying for a Personal loan
With these key points you are well equipped to apply for your personal. So go ahead and choose what’s best for you.
Please do share your feedback and any points you have regarding this subject which will help us learn together.
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Thank You!