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Cardinal rules of loan taking

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by: No more debt !
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Date: Sun, 14 Aug 2016 Time: 9:52 PM
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No matter what we do or earn, need for always remains. Sometimes, it is an emergency and other times, it can be a well thought out idea. But whatever is need and amount of loan, the principles involving its repay are same .These principles should be taken into consideration before going for loan. The first, the person should never take loan just because it is easily available through banks or other non banking financial institutions.

 Loan should be within paying capacity

This principle is based on common sense and it says that the rate of EMI should not be more then 10 – 15 %.of the income. If a person has taken other loans than the total amount spend on paying EMIs should not be more than 50 % of the income of the person.

Keep loan for shortest period possible –

The duration of loan repayment can vary from bank to bank and it also differs for different loans. For example, the home loan can be paid back in 30 years. The easy and low rate of EMI attracts person to go for longer durations. The person should try to pay back as soon as possible. It keeps the outgoing money through interest rates low and also gives peace of mind.

 Keep the schedule

 A person should never miss the date for payment of EMI. Whether it is short term loan or big amount, the payment on time, keeps money on which interest is calculated, low. The missing an EMI or Credit Card Settlement in Delhidelaying the amount, damages the credit worthiness of a person. This profile can hit next time when loan application is processed.

 Never borrow money to invest in stock market –

 During rally in the market, some people are tempted to take the loan and invest in some hot stocks. This is the most dangerous form of gambling. Here, the person is taking risk, without any safety measures. The chances of losing entire amount are always there. Then even for EMI, the person may be forced to take another loan. Never allow this situation to emerge, where a person is taking loan to give EMI on some other loan. This is quagmire and person may never come out of it.

When some legal Personal Loan Settlement in Delhi  consultations on loan related matters are required, the experienced lawyers or legal experts should be consulted.  The experience in loan cases must gain precedence over qualifications.

About the Author

The author of this article is, recommends the legal services of Settlement Ease Indian Law Firm.


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