I got a wrong Personal Loan!

Imagine a scenario and this is a real life one. How many times have you gone to a shop and bought an article like a dress or TV or phone because you either instantly liked it, or it was discounted or the shopkeeper said it was going out of stock. Now in each case, how many times have you got back home post purchase and found out it was available cheaper elsewhere. Maybe online, maybe a friend told you or maybe a bigger discount was coming up. Iam sure it must have happened a few times to you all.

Yes, I get that feeling because who hasn’t this happened to. Now if you feel so angry about a dress or an electronic item, imagine what you would feel if this happened in the case of a Personal Loan worth Rs. 3 Lakh. And this is bound to happen if you don’t pay attention. Why do I say this? It is because giving out a loan in as much as it is a service, is also a hard-core business. And to come to the point, as in any business, people are desperate to sell things to you. In some cases the desperation becomes so serious that the service part is all but left out. You need to be objective and logical when taking a Personal Loan to avoid this situation.

So let me explain what happens in some cases when things are not done in an objective and transparent way. To start, most of the calls and mails you get offering you a loan are from agents and not from the banks themselves. Which is not bad and it’s a good way of doing things. The thing is that most of the callers of these agents are organized in the form of bank or NBFC sales groups. Consequently, each of these sales groups has a target which they have to fulfil. So any caller who is contacting you from a particular agent is trying to sell you the personal loan for that bank/NBFC and not a personal loan which best suits your requirement. Here are some of the banks and And what suits you best can be anything…from a bigger amount to a lower rate of interest or a zero pre-closure charges option. It does not matter to them what you require, they will try to convince you on one advantage that their client excels on. Well they have to meet their targets right!!!

An example here would help. Let us say I have a friend called Karthik who requires a personal loan to meet a sudden expenditure he had to incur. He wants a loan amount of Rs. 2,00,000 which he wants for 4 years but is pretty hopeful he can pre-close in 2 years. He got a call from an agent telling him that he could get a loan from a bank X for the amount without a pre-closure option at 14% as against a bank with pre-closure with a 15% interest rate. Unfortunately, Karthik was convinced by the immediate lure of the sales pitch and took the 14% loan with no pre-closure option.

An immediate calculation would reveal that for the loan options with pre-closure even with a 15% rate of interest, the total amount of interest would come to Rs. 48,400. The one for without a pre-closure option would come to Rs. 62,400. A clear difference of Rs. 14,000. There are many such scenarios you need to be aware of. But most important is the transparency that an online loan aggregator can bring. They can clearly show you the difference through an EMI Calculator like this and also difference between deals of different banks. So pick the basket you want to put your eggs in wisely because you get only one basket.