The number of customers taking loans in the country has increased rapidly. Banks and NBFCs are offering secured and unsecured loans at attractive rates.
The number of online lending platforms in the country has also increased rapidly. With this, it has become easier to take a loan from the bank. Due to the easy availability of loans, people are managing their finances in their lives.
We are telling five such things related to bank loans, which should be kept in mind while taking the loan:
1. Interest Rates: Fixed or Variable-
In the case of bank loans with fixed interest rates, the interest rates remain the same for the entire tenure of the loan. In bank loans with variable interest rates, the interest rates are linked to the Marginal Cost of Lending Rates (MCLR) and these keep changing.
Given the current low-interest rate environment, you can benefit from variable rates only when the interest rates fall further. When you see that there is a possibility of an increase in interest rates, then you should immediately shift to fixed interest rates.
Shifting from a fixed to a variable regime is not so easy. There are some expenses associated with this.
2. Premature repayment of bank loan or part payment charge-
You can repay any bank loan before its stipulated period. In case of part payment, you pay a part of the outstanding amount of the loan.
While taking a bank loan, most people do not have any idea whether they can repay the loan in time or not. The truth is that more than 50 percent of people look for this option midway through the loan tenure.
You should keep in mind that you are aware of all the terms and conditions related to premature repayment of bank loans. If there is any charge for premature repayment of a bank loan, then you should find ways to avoid it.
In some bank loans, part or prepayment is not allowed before one year.
3. Mortgage Linked Insurance Scheme-
When you take a big bank loan, imagine the worst situation in that case. If a person taking a bank loan dies suddenly, it will be a huge burden on his family.
An insurance policy like the Mortgage Linked Insurance Scheme will not only reduce the burden on your family, but the insurance company will also repay the remaining amount of the bank loan. This will make the future of your family secure. Take it not as a burden but as a help.
4. Interest Saving Scheme-
Many banks offer flexi schemes along with mortgage loans. In this, instead of repaying the loan amount, you can deposit the additional amount in your savings/current account in the bank. This account is linked to your home loan account.
While calculating the interest, the loan-giving bank does not add interest on the amount deposited in your account and adds interest only on the outstanding principal amount, due to which the burden of the bank loan on you gets reduced. You can also withdraw the amount deposited in your account as per your need.
PC Social media
