The ideal way to spend for the festivities or to fulfill any other financial goal for that matter is by saving regularly. But many families tend to apply for a personal loan to tide over their festive purchases and expenses. However, you must realize that personal loans are liabilities and need to be paid back. Apart from banks that offer personal loans, many financial institutions these days offer a variety of loans. Most banks provide attractive deals to the consumers and lift off the weight of festival expenses. Making it easy to be enticed into getting a personal loan for your festive season spending.

When should you take a festive season personal loan?

Taking a personal loan requires planning, you have to decide the purpose of the loan whether it is for shopping jewelry, appliances or for minor home renovation. During the festive season, the processing fees and personal loan interest rates are quite low. This makes it an ideal time to get a loan. For a festive season personal loan, apply online and avail all the additional benefits it has to offer. Most people consider funding their festive purchases with their personal savings. But if you still fall short of money, you must do so quite sparingly. Here is what you need to understand before taking any personal loan.

Rate of interest of personal loan

Be aware of lenders that try to fool you with a flat rate of interest and make it look cheap. When applying for a home loan the applicants should always ask for the rate of interest of personal loans on a monthly basis. A flat rate of interest may appear low, but the interest paid by the borrowers is quite high on a monthly rest basis.

Processing Fee

The processing fee is the cost incurred by the lender to process the loan application. This fee covers the losses incurred by the lender and the commission payable to an agent if any. If you apply for a loan in a smaller non-banking finance company, the processing fee can be higher. You either have to pay the processing fee upfront or it get it added to the loan amount so that your EMI gets adjusted accordingly.

Prepayment charges

Some banks, have penalty rates for the customer who decide to prepay their personal loans. The Reserve Bank of India had recently directed banks to stop charging customers when pre-closing a loan account, but the prepayment charges only apply to loans taken on a ‘floating rate’ basis. So, the rule does not apply to personal loans that are on a fixed rate basis.

So, there’s no need to hold on your festive spends getting a loan will support all your needs. You can solely focus on enjoying and celebrating the festive season with your friends and family. For an online personal loan, apply online and get hassle-free loan approval. You can then submit your documents and identity proof for verification. Once your loan gets approved, you’ll then be able to receive your personal loan instantly.