Planning to take a personal loan? Do not over-leverage this festive season

Topics Personal Loan

Photo: Shutterstock
  • There is a wide variation in interest rates on personal loans. They can range from 10.35 per cent to 21.5 per cent 
  • A personal loan of Rs 7 lakh taken for five years at an interest rate of 10.35 per cent will mean an EMI of Rs 14,994. The total interest cost will come to Rs 1,99,626 over the tenure of the loan
  • On the other hand, a similar loan taken at the highest interest cost of 21.5 per cent will mean an EMI of Rs 19,135 and a total interest cost of Rs 4,48,086
  • Due to such wide variation, it always makes sense to scout around for lenders who will make the best offer instead of opting blindly for the pre-approved loan offer that you enjoy with your bank
  • By maintaining a good credit score—of above 750—you can ensure that you get this loan at a lower rate 
  • With the festive season around the corner, lenders will make attractive offers 
  • Make sure that the sum total of all your EMIs does not exceed 50 per cent of your take-home salary 
  • Interest rates on loans against assets are more attractive

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel