While Taking Loan – If you also take or want to take a loan from the bank, then before that it is very important for you to know some basic things. Due to which you will not have to face problems later.
If you also take or want to take a loan from the bank, then before that it is very important for you to know some basic things. Due to which you will not have to face problems later.
What are the 5 basic things to keep in mind while taking a bank loan?
Raj Khosla-
A closer look at the bank loan business for nearly three decades reveals that the number of loan takers in the country has increased rapidly. Banks and NBFCs are offering secured and unsecured loans at attractive rates.
The number of online lending platforms in the country has also increased rapidly. With this it has become easy to take loan from the bank. Due to easy availability of loans, people are doing financial management in their life.
We are telling five such things related to bank loan, which should be kept in mind while taking loan-
1. Interest Rates: Fixed or Variable-
In case of bank loan with fixed interest rate, the interest rates remain the same for the entire tenure of the loan. In bank loans with variable interest rates, the interest rates are linked to the Marginal Cost of Lending Rates (MCLR) and keep on changing.
Given the low interest rate environment at present, you can benefit from variable rates when the interest rates come down further. When you see that there is a possibility of an increase in interest rates, then you should immediately shift to a fixed interest rate.
Shifting from fixed to variable regime is not that easy. There are some expenses attached to it.
2. Premature bank loan repayment or part payment charge-
You can repay a bank loan before its due period. In case of part payment, you pay a part of the outstanding loan amount.
While taking a bank loan, most of the people do not have any idea whether they can repay the loan ahead of time or not. The truth is that more than 50 percent of the people explore this possibility only in the middle of the loan tenure.
You should keep in mind that you are aware of all the terms and conditions related to prepaying the bank loan. If there is any charge for repaying the bank loan ahead of time, then you should find ways to avoid it.
In some bank loans, its part or prepayment is not allowed before one year.
3. Mortgage Linked Insurance Scheme-
Imagine the worst case scenario when you take a big bank loan. If the person taking the bank loan dies suddenly, then a big burden will come on his family.
An insurance policy like Mortgage Linked Insurance Scheme will not only reduce the burden of your family, but the insurance company will also pay the remaining amount of the bank loan. With this, the future of your family will be secure. Take it not as a burden but as a help.
