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The festival season in India starts from August-September. Then it goes on till the New Year Celebration in December. During this, many people make plans to buy a house, car or other expensive things. It is considered auspicious to buy these things during this time.
Hence the demand for loans increases in this season. Banks also launch festival loan offers to take advantage of the opportunity. This includes things like waiver of processing fee to concession in interest rate.
If you want to take advantage of the festive loan offers of banks, then it is important to keep some things in mind. First, the loan is a responsibility.
If you are taking a loan, then it is necessary to repay it within the stipulated time. Failure to do so may damage your credit score.
If you take a loan and repay it on time, it will have a good impact on your credit score.
Here are five things you should keep in mind before taking a loan:
Check your budget
Many times during the festival, seeing the offers of companies and banks, we decide to make big purchases. Then later we start feeling this burden. That is why first you should decide your budget for shopping during the festival.
If you are thinking of taking a loan to buy something, then it would be better for you to decide the amount of loan you should take.
Keep track of credit score
Banks or NBFCs check your credit score before giving you a loan. Generally a credit score above 750 is considered good. If your credit score is low, then you should try to fix it by repaying your old loan. You should avoid taking multiple loans in a short period. This has a bad effect on your credit score.
Choose loan options wisely
If you are buying an expensive TV, then it would be better for you to take a consumer loan instead of using a credit card. Therefore, before buying, check all the loan options. Select the loan in which you are seeing the benefit.
If the interest rate of a loan is low but the processing fee is high, then you need to see what interest rate you are paying over the total tenure of the loan. Taking a loan with low interest rate will be beneficial.
Check the loan terms and conditions properly
If you are taking festival loan offer, read the terms and conditions before signing on the form. Do not sign the form in a hurry. Many a times it happens that the information given to you while taking a loan is incomplete. This leads to problems later. So it would be better to inquire about this beforehand.
Never miss EMI payment
After taking a loan, you need to remember its EMI payment. You have to remember the date of its payment every month. Missing EMI payments can have a negative impact on your credit score. This will make it difficult for you to take a loan in the future.
So you should not miss a single EMI.