Is the Fast Cash Personal Loan Option For You?
Not a day goes by without being assailed by offers for fast cash personal loans. The marketing teams at banks and other NBFCs come up with catchy slogans and racy advertisements to make you avail a personal loan. The best advice given by financial gurus is to avoid quick unsecured personal loans as much as possible.
However, there are situations when you have to take up a personal loan. If you find yourself in such an emergency, these factors can help you make the right decision and help you in the long run.
Know Your EMI:
Since easy personal loans are unsecured; they have exorbitant interest rates that can go up till even 30% depending on your credit history and repaying capacity. Banks offer fast personal loans for sums up to 30 lakhs and the loan period varies from 1 year to 5 years.
Assume that you have availed 4 lakhs for five years at 20% per annum. In this case, your EMI is Rs.10,598/- per month. At the end of the loan period, you would have paid around 6.45 lakhs. Meaning you would have paid nearly 2.5 lakhs as interest.
Make use of online EMI calculators to have a fair idea of the amount you’ll have to pay every month and then decide if you can afford the loan or not.
Don’t forget the Additional Costs:
Apart from the interest levied on guaranteed unsecured personal loans, there are other charges like processing fee, late payment penalties and pre-payment charges. The processing fee varies from 0.25% to 3.03%, and the prepayment charges come around 2-5% of the outstanding principal. Also, banks offer preclosure only after you have paid the interest for at least a few months. The late payment penalty is another 2%.
Your Credit History Determines the Interest Rate:
Banks make use of your CIBIL score as major criteria in determining the interest rate for your loan. Also, the loan approval ultimately rests on your credit score. Higher CIBIL score not only ensures that your loan gets approved but also lowers the interest you’ll end up paying.
So, consider your credit rating, other loans that you have availed, outstanding credit card bills before applying for instant personal loans online. It makes sense to improve your CIBIL score before applying for personal loans.
Avail Easy Personal Loans, Only When you can Repay it on Time:
Considering the high-interest rates, it makes sense to opt for fast cash personal loans only when you have no other choice. Also, ensure that you have the potential to repay the loan regularly and as early as possible.
Antworksmoney offers online personal loan services. Check this out.
