Tuesday, November 18, 2014

How to obtain a Cheap EMI Loan or any other Loan?

How to obtain a Cheap EMI Loan or any other Loan?

You are in a plan to buy a big Product like purchase a House or Car etc.

So it is very necessary to be careful before you apply to or take Loan because it may be expensive than others banks are providing.  Therefore it is better to take some important steps before you take a Loan which are given below:

The below are some of the important points which you need to be clarified before you apply or take an EMI Loan or any Loan (Home, Car, Personal and may be any other Personal Finance Loans):

All types of Loans are not offered at same Rate of Interest, why is this?

Loans are offered at different Rate of Interest because the main reason or even 100% reason is the Security of the Loan.  For example Personal Loans are more costly than Car Loans and Car Loans are more costly that Home Loans, the reason is Security of the Loan; let us see the reason below:

If you take Home Loan the security for Home Loan is Home itself.  It means the banker can recover the Loan amount if the borrowers default to pay the Loan instalment through sale of home.

In same way if you take Car or Vehicle Loan the security is Car or Vehicle itself like Home Loan.  Then why Car or Vehicle Loans are more costlier than Home Loans, the reason is Car or Vehicle get warned out time by time which will result in depreciation of the value of the Car or Vehicle as a result if the borrower default to pay any instalments the banker may not recover total amount even after selling the Car or Vehicle.

Personal Loans are issued on the security of Salary or some other income like Income from Profession which are intangible securities therefore it becomes harder to banker to recover the Loan instalments if the borrower default.

So it is clear that Security of the Loan is the main reason for cheap or costly Loan.

Now if you want to take a Personal Loan then be clear that you are not Including tangible assets like Car or Vehicle, House Renovation etc.  instead you take Loan for tangible and intangible assets separately.  For example if you want to take Personal Loan for your Child Education and to purchase a Vehicle then take separate Loan for both.

See we can get various types of Loans with different in Interest Rates which are included in the Head of Home Loans, Car Loans, Personal Loans etc.

Click on the below links to know more:

Now we can think more about the Security like how it would be if we take loan by providing extra security than what we provide vehicle for Vehicle Loan, salary security for Personal Loans etc.

The above idea is nice you can try in this way also, for this you should ask the banker that you provide some extra security like Fixed Deposit or some Valuable Property etc. if the banker convinced he may give you a cheap Loan.

Now after deciding what type of Loan (Home Loan, Car Loan Personal Loan) to take, we need to think of the other factors like which bank is best for my Loan.

Lot of people will consider only Interest Rate difference of difference banks and conclude on the Bank to approach for Loan but it’s not like this you will have other charges applicable on EMI Loans.  Details are given in below Link

Link: What are the Fees and Charges payable and when are they payable

You should also like to know difference between Floating Rate and Fixed Rate EMI Loans because Floating Rate EMI Loans are offered at less rate of Interest than the Fixed Rate EMI Loans.

Author:  B. Naveen Chandra Gupta
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