What am I?
Unlike other loans such as a car or home loan, I can be put to use for any purpose. You don’t need to keep anything as security with the bank to obtain me.
Charges around me
I come at an annual interest rate of 12-25%. To get me, you will have to pay a processing fee, usually 0.5-2% of the borrowed amount. If you want to get rid of me before the term gets over, you will be slapped with a prepayment penalty of 2-5% of the outstanding balance. And don’t forget the service tax of 12.36% per annum. So, if you borrow Rs1 lakh for three years at 12.5% per annum with a processing fee of 1%, you will pay Rs20,433 in interest and Rs1,000 as processing fee.
What’s my advantage?
Depending on your credit history, eligibility and payment capacity, you can get anything between Rs25,000 and Rs15 lakh, or even more, through me. Use me to pay off your dues on a credit card, which charges an annual average interest of 35%, much higher than what I charge. Moreover, you can get me in less than 48 hours.
Red flags about me
Getting me is easy, but before taking me, ensure that you really need me because I am dearer than most other loans. Loans such as loan against property or assets come with competitive rates of 12.5-15.75%.