Personal loan is like the proverbial "Sword of Damocles" hanging over the borrowers head, till the time they repay the entire amount. However, if you have to take a personal loan, then it is important to be clear about a few things.


  1. You should do a detailed market survey of the various options like the interest rates offers of different banks, the pre-payment charges they levy, and their terms and conditions.
  2. Interest rates are the most critical part of all the costs that you pay. For this reason, you should choose the cheapest option available. Beware of banking terms such as flat personal loan interest rates that seem to be cheaper but, in fact, are the most expensive ones. For instance, A 7% flat rate would come out to an effective cost of around 13%. Therefore, it's always better to opt for a monthly reducing balance option other than a half-yearly reducing or flat-rate option that would come out to be a lower effective cost for the same stated interest rate. Interest-free loans appear to be fascinating, but one must consider them with suspicion.


Apply For Personal loan


  1. There will also be some other costs included such as processing charges, etc. You should first confirm for zero processing fees and zero penalty pre-payment option. If not available, then the lowest cost would be a better alternative. Make sure that you work out as to how much these other charges add up to. So, even though, the interest rate may be lower, it usually adds up to be more expensive.
  2. Often, the EMIs may come out a lot more than what you can afford monthly. But keep in mind that you should know that a lower period will reduce the loan amount, and lower loan amount will reduce the tenure.
  3. Make sure that all deals and offers agreed upon are supported by relevant documents. Always ask for a letter to banks letterhead mentioning the exact rate of interests, processing fees, pre-payment charges along with interest schedule. Also before signing the documents, make sure you re-check all the terms and conditions of the bank.
  4. In any situation, do not provide any false information to the lenders. This may amount to fraud and put you in trouble.

EMI Calculator Personal Loan Interest Rates
EMI Calculator Personal Loan Interest Rates