Cons of taking a Personal Loan
by Finway FSC Empowering People FinanciallyEverything follows the rule of being 'Grey', even Loans. If
there are advantages, there certainly are some disadvantages of taking personal
loans. Let us know what are the cons of taking this Emergency loan online or through a bank.
If a personal loan is taken through a credit card, the chances
are that upon a default the arrears accumulate and the loan increases exponentially.
This means, that since the loan is taken through credit card, the amount to be
repaid each month is fixed. However at some point in time, if you fail to pay
the installment, the late fee and the defaulting fee garners a lot of interest
for the borrower.
High Interest Rates: If you plan to take a personal loan, make sure you do that
directly from a financial institution and not through a credit card loan. This
may levy interest rates that are high. There are other loans such as home
equity loans that can be taken for a home loan in Delhi, or any other city in India which offer a
low-interest rate. So look for alternatives before vesting your interest in
Personal loans.
Penalties: After you take a personal loan for a particular tenure, even if
you want to repay it earlier than the stipulated time, you will be asked to pay
a prepayment penalty. Also, failing to pay the EMI's lead to legal action by
the banks. Hence, if you prepay, you pay penalty and if you miss, then you
obviously pay the penalty. So be careful when you chose a tenure to repay the
Personal Loan. Besides, if you once lock the tenure of repayment, you do not
have the authority to change the same.
GST Rate: A GST Rate of 18% is also levied on the instant personal loan.
This makes the interest even soar higher.
Scammers: There are numerous not so renowned NBFC's that vanish overnight
after charging a processing fee and then not processing the loan. This leads to
distrust and a waste of time.
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Created on Aug 27th 2019 23:21. Viewed 323 times.