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Why is assessing processing fees and other charges as important as evaluating personal loan rates?
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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.
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Whenever you borrow any proceeds through a personal loan, one of the essential factors to consider is the rate of interest. The personal loan interest rate determines your loan cost and is vital in computing your personal loan EMI (equated monthly instalments). However, it is necessary to note that just focusing on the loan rate is not enough. For a lower overall loan burden, it is necessary to assess other fees linked with the loan. These fees include processing charges, part-prepayment and foreclosures fees, stamp duty fees, insurance premium costs, and others.
Discussed here are the reasons why it is just as necessary to evaluate processing fees and other charges as it is to assess your personal loan interest rate.
By factoring in additional fees such as processing charges, insurance premiums and stamp duty charges, you get a comprehensive understanding of your thorough loan cost. While personal loan interest rates might appear attractive, a high processing charge can impact the overall amount you require repaying. Assessing such fees permits you to choose a loan with a lower thorough cost, thus saving considerable funds over the long term.
By evaluating all your fees associated with your preferred loan deal, you get a clearer picture of the terms of the lender. This enables you to avoid any hidden expenses or surprises that might come up during the repayment tenure. Having a complete understanding of loan deals allows you to make a better choice and select a prudent deal for your financial requirements.
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Processing fees and other charges can even impact your eligibility chances for a personal loan. For instance, if a lender incurs a high processing charge, this gets added to your loan cost, which further impacts your personal loan eligibility for a higher loan proceed. By evaluating such fees upfront, you can select a loan deal in alignment with your eligibility and borrowing preferences and needs.
Evaluating processing fees and other charges enables you to compute your loan repayment in an accurate manner. For precise computation, you may use an online personal loan EMI calculator. This tool assists you to plan out your finances prudently and allows you to comfortably repay the loan without stressing much on your finances.
Ending note
Before hitting on any personal loan apply online option, it is equally necessary to evaluate your processing fees and other charges associated with the preferred loan deal. By considering this, you get a clearer understanding of your thorough loan cost, accurately compute your repayment figures, ensure transparency in loan deals, and understand the effect on your loan eligibility chances.
To make a well-informed decision, you should use an online personal loan EMI calculator. Using this calculator, you can compute the loan repayment tenure and interest rate as per your preference post factoring in the other charges incurred by the lender. Once you are aware of the preferred loan figures, negotiate with the lender to offer you the same deal as computed using the calculator for a smooth repayment experience.
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