Have you availed personal loan?

For any loan, don't forget to take an insurance policy proportionate to it. In case something untoward happens, there will not be pressure on your family members regarding the loan. Nowadays, some companies are offering insurance cover for EMIs if the loanee loses his/her job. Consider such policies as a safety purpose.

Hyderabad: There are many institutions that dole out personal loans unmindful of their purpose. We would have seen people facing problems repaying personal loans. To avoid such stress, it is better to follow certain tips. With Electronic Clearing Service (ECS) enabling monthly deductions directly from the bank account for loans, it is important to retain a sufficient balance in the account. Earlier, ECS was not processed on Sundays and holidays, but no such luck now. The EMI claim reaches the bank or financial institution on a specified date. It is advisable to check your balance a day before and after EMI due date, without fail.

For instance, if you don't have a sufficient balance in your account, you should use money from your emergency fund or savings to honour the ECS. Later on, when you have sufficient funds on hand, you could refill your emergency fund or savings, from where you have withdrawn the money. While availing of a personal loan, you should keep sufficient money to cover at least two or three EMIs. For better liquidity, it is good to invest in liquid funds. And also, in investment planning, you need to include EMIs without fail.

If a situation arrives, where you are unable to honour an EMI payment, it is advisable to inform the respective bank or institution beforehand. Explain the reasons behind the inability to pay EMIs and request them to halt ECS claims for some time. Usually, banks entertain such requests from customers. Generally, banks and institutions lay penalties for not clearing monthly instalments, provided you inform your inability beforehand, then you are eased off some pressure.

For any loan, don't forget to take an insurance policy proportionate to it. In case something untoward happens, there will not be pressure on your family members regarding the loan. Nowadays, some companies are offering insurance cover for EMIs if the loanee loses his/her job. Consider such policies as a safety purpose.

Borrowing from RBI-recognised institutions is always a safe bet. Don't fall prey to institutions that dump loans on you even without asking basic questions, which could later lead to complications. We are witnessing rogue apps which are harassing borrowers even after paying back the loan amount. In such circumstances, you can lodge a complaint with the police and also register a complaint under the RBI Integrated Ombudsman Scheme.