Festival time, and Dhanteras in particular, is generally a time of joy and new beginnings. With expectations of new purchases, investments, or even paying off dues, people do borrow to meet their requirements. Out of all the types of borrowing options available, personal loans are one of the most popular options for many. They are within hand, insecure, and facilitate a range of requirements, from purchasing gold to paying for the Diwali celebration. And if the lender goes blindly into it without factoring in the rate of interest, he/her might have serious financial liabilities.
It is essential that if you plan on taking a personal loan this Dhanteras, to be clear on how to manage interest rates and choose proper terms so that you can remain financially secure. This article highlights important tips on tracking interest rates and managing your personal loan needs during the festive season.
Understanding the Importance of the Rate of Interest for Personal Loans During Dhanteras
The rate of interest for personal loan is perhaps the most important aspect you need to take into account before taking a loan. It has a direct bearing on the EMI (Equated Monthly Installment) you make as well as on the overall cost of the loan. Any slight difference in the rate of interest translates into huge changes on the amount you will repay over the period of the loan.
Even during holiday seasons like Monsoons or Dhanteras, banks go into promotional mode by introducing schemes, possibly for lesser interest on personal loans, longer repayment terms, or waiver of processing fees. These schemes may seem lucrative, yet they need to be analyzed in detail and rates compared with those of other lenders. Below are some hidden charges or conditions that could be unfavorable, and therefore, one piece of good advice is to read the fine print.
While determining the interest rate, bear in mind whether the interest rate applicable to the loan is fixed or floating. Fixed rates make you pay EMIs of equal amount for the entire tenure of the loan, whereas floating rates change with market conditions. Fixed rates may be suitable for taking a loan during the festival season so that you can plan your repayment accordingly.
Top Tips to Manage Personal Loan Interest Rates on Dhanteras
In order to utilize a personal loan to the maximum on Dhanteras without getting into a debt trap, use these expert tips:
1. Compare Lenders for Best Interest Rates
Don’t accept the very first lender who gives you a personal loan. Compare and filter various options that are available in the market. Various banks, NBFCs, and fintech lenders compete to lend money to Dhanteras customers. Utilize the use of loan aggregator platforms to compare personal loan interest rates on one platform. Try searching for lenders who are providing special offers and low interest rates on Dhanteras.
2. Have a Good Credit Score
Your credit score is directly linked to the interest rate you get from lenders. If you possess a good credit score (750 and above), your lender will regard you as a risk-free borrower and give you personal loans at preferential rates. Get your credit score verified and have errors, if any, corrected before opting for personal loans online. Maintaining a good credit record will give you better negotiating leverage to obtain better interest rates.
3. Look out for Seasonal Discounts and Offers
On Dhanteras, certain lenders and banks also offer loans during the festive season campaigns. Be alert for these discounts, such as lower interest charges, no processing charge, or cash back. Make sure that such discounts do not imply additional interest rates in the future. Check whether the net cost of borrowing would be proportionate to your affordability.
4. Borrow Only What You Need
While the lenders can offer you a higher loan quantum, only borrow what you require. The greater your borrowed amount, the greater the interest you will have to pay over the repayment duration. Plan out your Dhanteras and festival expenses and borrow a loan only for that sum, which can be accommodated comfortably in your repayment schedule.
5. Select the Suitable Loan Tenure
Your loan term is also important in determining your interest outgo. A longer term can reduce your monthly EMIs but increases the amount of interest paid over a time period. Alternatively, a shorter loan term reduces the total interest outflow but increases your EMI burden. Choose the term that fits your monthly cash outflow and total interest liability.
How to Apply for Personal Loans Online on Dhanteras
The process to apply for personal loan online has been made simpler than ever before, with online websites making the entire process from application to disbursal uncomplicated. The following is how you can apply for a loan simply:
Research Lenders and Offers
Make use of various online lending websites or utilize loan comparison websites to look for the best suitable lenders. Compare interest rates, eligibility criteria, and festival offers before making a decision.
Check Your Eligibility
Each site has an eligibility calculator. Input your income credentials, credit score, and other details to view customized loan offers.
Online Submission of Documents
Long-form submissions are a thing of the past. You can upload documents like identity proof, address proof, income statement, and bank details directly on the site.
Instant Approval
Online lenders provide instant loan approval, particularly during the festive season. The loan amount is disbursed on approval within hours or a couple of working days.
Monitor Repayment Timelines
On acceptance, track your repayment schedule online through the lender’s website or app. Pay punctually to avoid fees and boost your credit score.
Conclusion: Lend Wisely This Dhanteras
Borrowing against gold to get a personal loan on Dhanteras will enable you to achieve your financial objective and enjoy the festival without any remorse. But ensure you have it as a priority to shop around for the interest rate on a personal loan from various lenders and find out festive packages that are suitable for you. Responsible borrowing is the equilibrium between the loan amount and your repayment ability and a good credit score to get lower interest charges.
Happiness and prosperity are meant to be the results of any celebration. A properly planned personal loan can follow your celebration without bringing any financial burden to you. Having the tips in mind and making sure that your personal loans are taken out online after the legal research will unleash a bit of money for you to enjoy the festival to its fullest.
Wishing you a Happy Dhanteras, and may your days be filled with wealth and financial prosperity!
