A personal loan is one of the most popular and easily available loan types in the market. It offers greater flexibility to borrowers and there is no end-usage restriction on the loan amount, which makes it a go-to financing option for millions of Indians.
However, being an unsecured form of credit option, lenders require you to meet multiple eligibility criteria and agree to their terms and charges before approving the loan amount. In certain cases, there may be hidden charges involved, which can turn into bigger expenditures over a period.
In this blog, we will discuss several forms of hidden charges on loans and ways to avoid hidden charges on personal loans.
Now you know the various types of hidden charges on personal loans that lenders levy, here’s how you can avoid them and save your money.
While availing of a personal loan, always read the loan documents carefully before signing the terms and conditions. The loan document lists all the types of charges the lender can levy and under what circumstances.
In the loan document, check the personal loan interest rate you’ve agreed upon, repayment tenure, repayment mode, and repayment terms and conditions.
You should not skip this process and take time to read the fine prints before you sign the loan document. Not reading the loan agreement is one of the most common mistakes made by personal loan borrowers, which makes them feel burdened later once the EMI schedule begins.
Always plan your personal loan repayments as per your repayment capacity to avoid defaulting on EMIs and late payment penalties.
Use the personal loan calculator to check the right repayment tenure and EMI amount for yourself before applying for the personal loan. Read the loan schedule thoroughly. If possible, always sign up for the auto-debit / ECS facility which will allow the lender to directly debit the EMI amount from your account on a particular date. Always ensure that the account provided for this purpose has sufficient balance. Not only will it help you to avoid the penalties, but it will also keep your finances in shape.
With the advent of new-age fintech platforms, access to online personal loans has become easier. By meeting all the eligibility criteria and uploading the digital format of documents required for personal loan, one can get funds credited to their bank account within a day or two. This happens only if the application meets the lender’s required criteria, the documents pass all verification checks successfully, and the loan gets final approval.
However, you need to be cautious, as most online lenders have very stringent terms and conditions and include various types of hidden charges.
Therefore, it is best to avail of a personal loan from a reputed lender like Fullerton India to keep yourself away from all such troubles.
Last, but not least, you should be aware of the different charges and fee types usually involved in a personal loan. Knowing beforehand can help you to plan your repayments in a better way and can avoid any such situation that can result in payment of such hidden charges.
Just by exercising a bit of caution and performing due diligence while signing the personal loan offer documents, you can avoid the hidden charges.