How To File For A Loan

All our lives we have been chased by the pressing need for money that drives all the clockwork of our world, and it is only fair for the youth to scream for ways to make it. We often see how many countries are metaphorically knocked to the ground due to enormous debts. Greece has been a world famous adversary due to extremely bad debt, or it may just be a PR stunt that lured tourists to visit out of sheer pity. These debts were mainly due to their debts to a variety of countries and the juggernaut, the World Bank.

So if you are introduced to the enormous extent to which bad debt can affect an entire nation, let alone an individual, it is important to ensure that we don’t bite more than we can chew. Our schools fail us. We do not fully understand the process of lending and unlimited lending. But fear not, here we are going to show you step by step how to apply for a loan and make it one that will not result in you being given a bad debt.

Bet on the amount of money you actually need

You need a loan for your education, but you think you might need a little more too, so be sure to add another 20 grand as your final loan amount and write it down. However, throughout the brainstorming session, you never considered the amount that you could keep as collateral or the ability to repay the amount when you start earning.

This scenario presents us with an odd dilemma, especially when trying to get into college that we may not want to put our hands in our parents’ wallets for. The first step to growing up is realizing the ability of our desired degree to find a well-paying fresher job. The value of our collateral also only comes into play later. So it is always worth taking out a loan that you can pay off relatively easily.

List banks next to interest rates

It goes without saying that we must select banks according to the interest rates and the moratorium period, or the period in which we are exempt from paying any form of money to the bank. Still, most of us don’t understand the need to make the most of a bank that our own safety net can fall back on.

Most banks in the public sector charge a 7.6% interest rate on an education loan that can go up to 10.6%, while the private sector can charge a 10% interest rate that can go up to 16%. Private bank interest rates vary from bank to bank, so it is always difficult to agree on one. For personal loans, on the other hand, the interest rate is comparatively higher than for education loans, as it usually starts at 10% and increases to around 16% in the public sector. Hence, it is always important to know where you are getting your loan from and this is where your target loan amount comes in.

It has to be said impartially that private banks have to be much more accountable in this day and age when public banks are being merged or dissolved.

Also read: Life Skills They Don’t Teach in School: How to Pay Utilities, Credit Card Bills

Decide on your collateral

Most banks require that collateral equal to the loan taken out be deposited with the bank. Some banks, especially student loans or education loans, choose not to maintain a collateral clause; However, for those who do, this step is for them. Your loan can have five lacs and therefore the bank will ask for a property as collateral to settle this loan amount.

Collateral can be anything from your life insurance papers to immovable property such as an apartment, house, or property. This must be decided with the greatest of thought, as it also establishes or breaks your loan agreement.

Note the time you have to repay the amount

This is the last step to take care of because most of the time all banks keep the same repayment period. For student loans, the standard repayment term is 10 years after the moratorium period.

With standard loans, however, the entire game plan takes a different route, as it depends on the plan chosen, as the repayment period can start at 10 years and end at 25. A standard or personal loan has essentially no upper limit if one has the necessary collateral. Thus, the borrower can be given a longer period of time.

Have your identification documents ready

Technically, this is the last step, but it’s pretty simple and something you would already know. But it’s super important. Always have your identification papers and all other necessary documents ready. Even your guarantor’s documents are extremely important.

This article was written to help you decide on the best loan plan that will suit your needs. This is especially close to my heart as I took out a student loan as a student and trust myself, I was rushed by the whole process itself. My mother helped me with this, but she was also new to the whole process.

Hence, these steps only exist to help you and another mom like mine make the journey a little smoother beyond that while you get your credit off.

Image sources: Google Pictures

Swell: Bankrate, Fullerton India, Bank Bazaar

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