Processing charges:

The processing fee for a personal loan is related to the administration costs of the lender. It ranges from 0.50% to 2.50%.

Verification charges:

A personal loan will be disbursed by a bank or financial institution only after the borrower's repayment capacity has been verified. Borrowers may need to hire third-party verification agencies. That is why they charge borrowers a verification fee.

GST:

All borrowers will have to contribute a certain amount toward GST.

Late payment fee:

When a borrower fails to pay the personal loan EMIs on time, they will have to bear a late payment fee.

Prepayment or foreclosure charges:

Borrowers are usually required to pay a prepayment or foreclosure charge when they are willing to close a loan before its stipulated tenure.

Types of Pre-Payment

Full Pre-Payment: It revolves around pre-paying the entire amount.
Part pre-payment: It entails prepaying a significant portion of your outstanding principal to your personal loan bank.

Modes of Personal Loan Payment or Repayment

Electronic Clearance System (ECS): It revolves around making repetitive and periodic transactions.
Post-Dated Cheques (PDCs): The payer writes a PDC to be withdrawn at a future date.
National Automated Clearing House: The centralised system was developed in India to consolidate multiple ECS systems. The system supports fund transfers between different bank accounts.
Debit mandate or standing instruction: In this case, the borrower can provide a fixed instruction to the bank to debit a specific amount from their account automatically.

Credit Clean-up:

You can improve your personal loan eligibility by increasing your credit score. A higher credit score makes you a reliable borrower.

Rebalancing your income and debts:

Your income-to-debt ratio helps determine the portion of your income that gets contributed toward covering your debts. A low income-to-debt ratio can make you more eligible for personal loans.

Consider Co-signers/Guarantors:

If you fail to repay your personal loan on time, your guarantor or co-signers will be responsible for repaying it. Therefore, adding a co-signer or guarantor makes you a low-risk borrower.

Limit Your Borrowing:

If you have too much debt, lenders will see you as a risky borrower. If you plan on taking a personal loan, try repaying your existing loans first.

Choose the Right Lender:

The best personal loan bank or financial institution will have less rigid eligibility criteria. As a result, working with a lender like Piramal Finance increases your chances of receiving personal loan instant approval.