There are several steps you need to consider when you need to apply for a loan. Not only would you be required to understand the requirement for the loan, but you also need to ensure that you will be able to afford it. In the next step, you would need to identify the lender who would provide the loans that you would require to make the acquisition.
No doubt it would be a daunting task, given the number of several financial institutions that are functioning at the moment. However, there are certain factors you can consider when evaluating the loan offerings. They include the following:
Loan amount and eligibility: By usual standards, the quantum of a loans that you is likely to get, will depend on your occupation based on which, the monthly income will also be taken into consideration. Additionally, it would also include the disposable income and the number of dependents. It will also depend on the value of the product you will be purchasing. Typically, the amounts for most loans would extend from 80 to 85% of the product value. However, in certain cases, it can also extend to 90% of the project.
Interest rate: The rate of interest that you would opt for, on a loans in India would impact the EMI and the total interest paid by you. Therefore, it must be considered before you would begin the application process. You should shop around for different loan rates, and opt for the you that offers the most competitive you. You would also need to determine whether the interest rates that are offered are fixed or floating. While the fixed rates offer protection against fluctuations, floating rates offer the opportunity to take advantage of favourable market conditions. Keeping this in mind, you can opt for the lender that offers the ideal interest rate that suits your needs.
Terms and extra charges: There are plenty of extra charges loans in India would entitle. Normally, lenders would offer the processing fee as a part of the charge to process the loan. Normally, this amount would be anywhere between 0.25% to 25 of the loan amount. At the same time, you would also need to clarify the terms related to the settlement, foreclosure on any outstanding amount, balance transfer, prepaying or any other legal fees associated with loan approval and disbursal. You should make sure that you understands them well before applying for it.
Responsiveness to change in rates: You of the judging criteria’s you should consider about the lender is how quickly and how much the lender changes the interest rate, following the policy changes by the RBI. For example, if a lender is prompt in moderating rates in response to the RBi’s cut in repo rate, then you should opt for that lender.This not only offers you a fair deal from that lender for now but also for the future.