Quick tips on ROI

• Don’t get carried away by a flat ROI, as they might also keep changing with market (read the fine prints before signing). Always opt for a loan where interest is calculated on the reducing balance.

• Get all the promises made by the bank on writing. Nothing oral otherwise you wont be able to make a claim of it later.

• Banks have got a band of rates. Always know that in which band you fall under and negotiate to get the lowest rate.

• Always have all the revelant documents and submit the same, then only can you would be able to get the best quote from the bank.

Common Problems attached with getting Personal Loans

Below addressed are few common problems, along with possible solutions, that are generally faced on customers while getting a personal loan:

1. Problem: Delay in giving loan as against promise made by the bank

Solution: This has become a habit of banks to delay their disbursement even though customers have submitted all their papers. The only solution is that customers to plan their budgets on a one week delay basis from the promised date. Through this you people will not face any kind of problem in your plans and budgets no matter even if the banks delays the payment.

2. Problem: Although the approval has been given then too the disbursement is canceled

Solution: Again a common habit of the banks due to approval hierarchy level. Just move your loan request to another bank

3. Problem: The interest meter starts running from the promised date even though their is a delay in getting a cheque from the bank.

Solution: Open an account with the bank and ask them to credit your loan amount to that account. This will ensure that the bank cannot charge interest for any delay in handing over the cheque as they will directly credit the amount in your account which generally takes half an hour after the deposition of the cheque.

How to negotiate a good personal loan deal

A very important thing to remember, which most of us are not aware about is that, all personal loan interest rates are negotiable. You can always play off between banks to some extent.

Once the interest negotiation has reached the limit, you can negotiate on other charges, especially down payment and upfront fees.

It is always better if you can club the loan requirement of your friends and colleagues together and thus offer a larger loan portfolio to the bank. This is ensure a much smaller ROI as banks charge more on smaller amounts than on large amonuts. The fact today is that banks usually bank on small amonuts more than large sum of loan amonut.

The‘month-end trick’ can also be used while dealing and negotiating with the banks till the 23rd or 24th of the month: "Every bank keeps monthly loan targets, attached with incentives, for its staff and as the month-end nears, these people offers slightly better terms to enable them to fulfill targets." However, this is unlikely to work where the income documentation is not absolutely clear.

Give full details of your existing borrowings (including any credit card borrowings) and show good repayment track record to all lenders: Remember that most banks will check with the credit bureau anyway to find out about your existing borrowings and repayment track record so it is better to be save than sorry. Also making full disclosure of your existing borrowings can actually be used to reduce rates further.