Skip to main content

HOW TO AVOID HIDDEN CHARGES WHILE GETTING A LOAN?



In recent times, there are number of popular and convenient loan schemes in the market. These financial tools offer greater flexibility to the customers which make it an easy to go funding option for population of India. Being categorized in secured and unsecured form of credit solutions , therefore lender requires to meet some basic eligibility criteria and agree on terms and conditions related to loan application.

However, in some situations when you "Apply For Loan" there might be some hidden charges involved that can turn into debt burden over a period. In this article, we will talk about several forms of hidden charges on loans and some remedies to avoid these charges on unsecured form of loan which are free of collateral and at higher risk to default by the borrower. Let’s, find some top of them:

  • Penalty for late repayment: As the name indicates a late repayment penalty is levied on borrower by the lender when he/she doesn’t pay their monthly installment on time or defaults on their EMI amounts. In such circumstances the lending institution charges a late repayment penalty from the borrower which usually ranges between 2-3 percent of the loan amount along with GST.
  • Prepayment charges: Usually when a borrower is rewarded by incentive from company, he /she want to use that money to partly or fully prepay the loan amount to reduce the monthly installment and rate of interest. However, some of the lenders do not provide this facility before a certain period but if you want to foreclose the loan or want to make pre-payment, they impose penalty on you.
The pre-payment option can be availed after paying certain number of EMIs and there should be no late repayments in the previous times. Depending upon the amount repaid, the pre-payment charges vary between 0-7 percent of outstanding loan quantum.

  • Processing fees: This charge is levied by the lender to cover all the costs related to approving your loan and its disbursal. It is very common in loan procedure and the amount is fixed percentage which is intimidated to the customer before they "Apply For Loan Online" or offline.  This all adds up to the total cost of availing of a loan.
  • Balance transfer cost: This process means for transferring your outstanding loan amount from your existing lender to a new lender at easy terms and conditions. It is more comparable to making a pre-payment; your existing lending institutions may impose some penalty to transfer your loan account to a new lending institution and gives you a no-due certificate.

Hence, you know the different types of hidden charges on unsecured loan that lenders levy but you have to avoid it by reading the terms of loan carefully, planning your repayments, availing a loan from reputed lender as well as stay aware of various fee types. Therefore, just by keeping all these things in mind and performing due diligence while signing a loan application, you can avoid these types of hidden charges on your loan to enjoy hassle free loan process.


Labels:

Comments

Post a Comment

Popular posts from this blog

GUIDE TO BUYING A USED CAR: FIGURING OUT INTEREST RATES

As of now, in the fast-paced universe of today, possessing a car is neither a luxury nor a need. While considering the practicality of purchasing a used car, the vast majority of individuals arrive at this resolution. In any case, financing such a purchase can be troublesome. This blog aims to impart information regarding the intricacies of used car loans, with a particular emphasis on the critical component of interest rates. What is a Used Car Loan? A " Used Car Loan " is a financial product designed to assist individuals with the expense of purchasing cars. A used car loan, in contrast to a conventional car loan for another vehicle, is designed to accommodate the extraordinary circumstances associated with purchasing a used automobile. Factors Influencing Used Car Loan Interest Rates 1. Credit Score: An essential part of loan applications, the credit score significantly impacts the interest rate determination process. Individuals must maintain a decent credit history bec
Post a Comment
Read more

EXPLORING OFFERS AND OPPORTUNITIES OF USED CAR LOAN

Many individuals instantly consider purchasing a brand-new car when they are thinking about buying a vehicle. The used car market has, by and by, as of late, acquired colossal traction. The availability of used car loans and the alluring motivating forces they give that may be of some value are two important factors adding to this development. In this article, we'll dive into the importance of used car loans and investigate some alluring " Used Car Loan " options that could be useful to you to make a financially wise choice while purchasing a pre-owned vehicle. Why Opt for a Used Car Loan? 1. Cost-Efficiency: For individuals hoping to purchase a vehicle without failing, used car loans are a financially mindful decision. While used cars have already encountered this early depreciation, new cars can lose as much as 20-30% of their value in their most memorable year. In this sense, used cars offer better value for your money, and a used car loan can assist you with getting
Post a Comment
Read more

STREAMLINING FINANCIAL ARRANGEMENTS TO APPLY FOR LOAN ONLINE

Financial requirements can emerge out of the blue in the present quick-moving world. Whether it's for buying another vehicle, uniting obligation, subsidizing a home redesign, or covering unforeseen clinical costs, a loan can frequently be a reasonable arrangement. With innovative progressions upsetting different parts of our lives, it's nothing unexpected that the getting landscape has developed too. Applying for a loan online has become progressively well-known because of its comfort, speed, and accessibility. There are different justifications for why people are choosing to apply for loans online and the advantages related to this methodology. Reasons to apply for loans online 1. Ease of Use - Applying for a loan through traditional means frequently includes different bank visits, extended paperwork, and long holding-up periods. Interestingly, the online loan application process offers unparalleled ease and straightforwardness. With only a few snaps, borrowers can get to dif
Post a Comment
Read more