Money matters
Know all about personal loan charges
A personal loan is an excellent financial tool to get the big plans on the road. A much awaited vacay abroad, kickstarting your small business or home renovation plans, whatever you’ve got in mind can become a reality with the right personal loan.Interest on the amount owed is not the only cost you will need to cover with a personal loan. To pick a suitable plan, you’ll need to explore the expenses involved along the way. Keep reading for an overview of these expenses.Processing charges and GSTYou won’t have to mortgage your house for a personal loan. It’s never that big an amount. So where does the financier mint the buck? Charges varying between 0.5% and 2.5% are borne as an administrative cost. These costs amount to every signature taken and every document forwarded from one department to another at the financier’s end. Call it the all-things-admin cost. Additionally, a GST amount for a total of services provided, add that too.Verification costsThe bank or financier has to go the extra mile to ensure that they’re giving money to a real person. A person with a physical appearance, a name, address, and bank details that match what is submitted to them. To be sure of this, banks hire agencies or have an internal verification team that checks credit scores, repayment patterns, and the identity of the individuals.Charges for this process are borne by the individual seeking a loan in the form of processing fees. These are usually a percentage of the loan amount, but you can get better pricing if you look for the right provider. Tata Neu’s Personal Loan comes with a flat ₹999 processing fee.Defaulters’ feeAlways seek help before committing to financial aid. Talk to a friend for their experience, and to a professional for their know-how of loans.You’re obligated to repay the equated monthly instalments as and when mentioned in your agreement. Failing to do so attracts penalties that may differ from one provider to another. So why pay more when you can pay on time!Penalty for early repaymentIf you’re trying to pay up early, your providers will charge a penalty varying from 2% to 4%. It may sound strange but there’s a perfectly logical explanation for that. When you repay a loan before the specified tenure, the provider may incur losses on the money lent. You owe them a fixed interest monthly, but if you pay up early, that interest amount for the remaining months is gone (read: their loss). This penalty amount is a fail-safe against such circumstances.Picking the right loanYou can explore many personal loan plans based on your goals. Never skip professional advice. Also, read the fine print, that’s where the extra sneaky charges are.As mentioned earlier, Tata Neu’s Personal Loan gets the dice rolling with a flat processing fee of ₹999 only. The fully digital application process needs minimal documentation and gives quick approvals. With this plan, you can choose a flexible repayment tenure that helps manage your finances better.
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