Facing a financial crunch is never easy. It can affect the well-being of a person adversely. At such situations, a bank loan can go a long way in easing out the crisis. While most of the personal loans offer lower interest rates, a few others also provide quick processing and immediate payment. The smålån med betalingsanmerkning (Bank loan with payment note) is an ideal way to manage your massive debts and other financial needs. The portals of www.bankrate.com discuss the various options available in different banks to meet the customer requirements. Here are a few must know tips before you avail a loan for your needs.
Borrow within your limits
Every other day, you would get a call, email or SMS about the various loan offers. Today, loans are approved within a few minutes time, and you receive the cash instantly. Net banking facilities are used to disburse cash without any hassle. Also, the interest rates are low, and you can choose your repayment period. All these potential benefits can lure you towards borrowing more than what you require.
You must always keep in mind the smart rule for availing a personal loan. The EMI that you pay should not exceed more than ten percent of your total monthly income. If you have accrued other loans, then your EMI payment should not be greater than fifty percent of your net monthly income. With the competitive rates of interest offered by every bank, do not fall prey to their business. Always calculate your income to loan ratio to prevent yourself from being imprisoned to your debts.
A shorter loan tenure helps
Considering the repayment period is an essential factor. If you keep extending the tenure longer, then you will enjoy lower EMI. But, in the long run, you end up paying more interest. Thus, opting for a shorter repayment period is a wise choice. For instance, if you consider a ten-year loan, the interest accrued for borrowed amount is 57 percent.
When you extend it to another ten years, it shoots up to a whopping 128 percent. A loan takes you towards negative compounding, the longer your repayment period, the greater the earning for the bank. If you get a 10 percent hike in salary every year, then make sure to increase your EMI as per your income to benefit at a larger level.
Be regular while making repayments
Never miss the due date for making a payment, it could either be paying a smaller credit card bill or a bigger personal loan. When you skip an EMI or postpone a due payment, it can affect your credit score. You lose the eligibility for availing a loan later in your life. When you are in a critical situation, it is essential to prioritize to pay the dues.
If you do not adhere to the dates, then you must pay a penalty fee as well as a huge interest for the unsettled amount. There could be changes in the interest rates with the arrival of new rules. So, consider taking a loan offered with the best rate of interest to meet your needs and repay them at the earliest.