Personal Loans - Too Good to Be True

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Personal Loans - Too Good to Be True
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• A small car outside your cottage, the best
  education for your child, a memorable wedding for
  your sister, the best treatment in town for your
  ailing family member, jewelry for your wife or a
  big refrigerator and a microwave and an
  air-conditioner, not to forget mounting credit
  card dues.
• The solution to these needs, wants and problems
  lies in finance. Name it and personal loans offer
  a quick, reasonably easy solution!

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• Unlike other loans, this loan is a hassle free
  loan. No clarification, guarantor, security
  required for this loan! Isn't it too good to be
  true? The loan can be used for renovating
  property, marriage expenses, medical expenses,
  holidays, purchasing consumer durables, higher
  education etc.
• But why a personal loan when there are
  specialized loan products to meet specific needs?
  They may not be always helpful.

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• Let us take the example of one of the most
  fundamental needs - good education. While an
  education loan covers the costs relating to your
  course and the cost of living, your parents may
  have still needed more cash! Who else would they
  turn to, but the good old friend-personal loan?
  You may find it difficult to get a study loan
  from banks if you plan to do a correspondence
  course or a part-time one. This loan will help
  you stick to your plans.

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• Fast forward. A fairly well-paying job, an
  educational loan to be paid off. Time to change
  your second-hand bike for a new car. You will
  surely not be an ideal candidate for car loans.
  The possibility of getting a car loan is low even
  when you settle for second-best, a used-car.

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• A personal loan will buy you a used car or a new
  one if your income can justify it. If you fall
  short of funds for the down payment of the car,
  (after getting a loan), this loan will help you
  seal the deal.
• Friends, girlfriends, dinners, parties, gifts,
  designer shirts, a happening social life, all
  this means mounting credit card bills. Don't
  fret. It will even take care of your mounting
  credit card dues in time of need.

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• Need your 'own' house? While the housing loan
  will help you get it, you may not have enough
  funds for the 10-15 per cent down payment that
  you require to buy a property? Believe it or not,
  the answer is a PERSONAL LOAN! You can spend on
  your wedding and then spend on needs such as
  appliances and jewelry with the help of a
  personal loan.

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• Sounds good, doesn't it! Well, there are a few
  things to keep in mind, about these loans. You
  get this loan, primarily based on your income. If
  you have taken any previous loan, the repayment
  track record along with your employer's profile
  will have a bearing on this loan eligibility. It
  can also be availed against proof of life
  insurance policy premium receipts.
• There is a catch though. The interest rates on
  these loans are high (as high as 22-30 per cent
  in some cases) and the maximum tenure is 60
  months or five years.

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• If you avail this loan for down payment or other
  expenses, it has an impact on your auto or home
  loan eligibility as it adds to the expenses.
• So, to conclude, this loan is like a magic wand,
  to be used selectively. Treat the personal loan
  as a last resort in times of need.

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