If you are going to take a personal loan, keep these things in mind, there will be no problem

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Personal Loan Tips: Personal loan is considered to be one of the best ways to deal with urgent financial needs. With the help of this type of loan, you can fulfill many purposes. If you are also planning to take a personal loan, then first of all it is very important to know about some important things.

Loan Processing Charges

In most banks, apart from the interest rate, you are charged a processing fee on personal loan. Processing fee is non refundable. That is, even if your loan is cancelled, you will not get its refund. This is often a small fee ranging from 0.5 to 2.50 per cent of the total loan amount. Along with this, 18% GST is also charged on the processing fee.

Verification charge

Before giving you a loan, the bank must check once whether the borrower has the ability to repay it or not. Pay a third party organization to verify your creditworthiness and look at your credit history. The cost of all this is recovered from the borrower.

Fine on EMI defaults

Once the EMI of the loan starts, it has to be repaid on time. Meanwhile, if for some reason you are unable to repay the EMI, then you may be charged a penalty. So try to repay the loan on time. Kotak Mahindra Bank charges more than Rs 500 for EMI bounce fee. Whereas, IDFC First Bank charges up to Rs 400 per EMI bounce.

GST (GST Tax)

If the customer requires additional services during the loan approval or repayment period, then he has to pay a small amount as GST tax. As per IDFC First Bank, applicable GST will be applicable on all service charges.

Prepayment/Foreclosure penalty

If you want to prepay the loan, then the bank charges you a prepayment penalty for this. In most cases it can be from 2 to 4 percent.

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