5 Vital Tips on Personal Loans

1. Combine incomes to increase eligibility

Combine your income with the income of your spouse or your parents to increase the amount of loan that you can get.

2. Be aware of the charges levied on every step.

Do not look at interest alone to determine the cost of the loan. Also look at the charges that the lender has. Sometimes a slightly higher rate might be better for you. Some of the common charges are processing fees, prepayment fees and non payment penalties and cheque bounce charges. Based on your need, e.g. you might feel that you might be able to pay the loan earlier than the tenure than you should be comparing the prepayment fees across all loans.

3. Use existing relationships to take advantage of discounts on lending rate

If you have an existing banking or a loan relationship with a bank or a NBFC, use it to negotiate discounts on the lending rate. The bank/NBFC would consider your proven track record of repayment or healthy balances in your savings account or fixed deposit in determining that you are a person with sound financial standing.

4. Match the repayment period of the loan to your needs

You must choose a repayment period and schedule that matches your needs. Choose a smaller repayment period if you are expecting an inflow of money in the short run. For instance, if you need a loan today but are expected to receive a large sum of money a year from now, then choose a lender who gives you the option of repaying the entire amount in a year.

5. Buy Loan Protector Insurance

Most banks and NBFCs provide group life insurance as loan protector insurance (or payment protection insurance). Buying this insurance ensures that the insurance company pays the lender in case you meet with any unfortunate incident. This is an affordable way of protecting your dependants from your liabilities.


For the first time in my life i am doing something that i am good at, in public. This blog is purely a cut-copy-paste work baring a few personal views. Their is a glut of sites, blogs, pages and views about investment & savings. Still understanding and finding the right instrument is difficult. This is an endeavor to simplify the complicated financial jargons and products to make it understood by laymen.

As the URL name suggests, it’s for laymen by a layman of finance. This blog is strictly meant for me, my family and my friends and their few friends. The blog is not meant for experts & gurus of finance.

The author of this page is not a registered financial advisor. One should not construe anything written here to be financial advice. All information is a point of view and is for educational and informational use only.