Diwali costs can add up fast, from new clothes and home decorations to gifts and big celebrations. For many people, a personal loan can be a great way to pay for these expenses without hurting their savings.
But how do you choose the best personal loan for your Diwali celebrations? With multiple banks and financial institutions offering different rates, fees, and terms, it can get confusing. Let’s understand here.
A personal loan can be a good choice for paying for Diwali expenses. Here’s why personal loans are helpful:
Unsecured: You don’t have to offer anything like your car or home as security.
Flexible: You can use the money for many things, like buying gifts or fixing up your home for Diwali or anything
Quick payment: Most personal loans are processed quickly, so you get the money in time for the celebrations.
By choosing the right personal loan, you can enjoy Diwali without risking your financial stability.
Before applying for a personal loan, it’s important to look at your Diwali budget. Knowing how much you plan to spend will help you decide how much money you need to borrow. Here are some common Diwali expenses to think about:
Shopping for clothes and gifts: Buying new clothes and gifts for family and friends can cost a lot.
Home renovation and decor: Many people like to fix or decorate their homes for Diwali.
Festive feasts and parties: Hosting guests or throwing Diwali parties can also be expensive.
Travel: If you plan to visit family or go on vacation during Diwali, that will add to your costs.
Any other things
Tip: Make a detailed budget for your Diwali celebrations to ensure you borrow the right amount and don’t take too much or too little.
The interest rate is the most important thing to consider when choosing a personal loan. Lower interest rates mean you’ll pay less each month over time.
Fixed-rate loans: The interest rate stays the same for the whole loan period.
Floating-rate loans: The interest rate can change based on market conditions.
Fixed-rate loans are stable, while floating-rate loans could save you money if rates go down. During Diwali, many banks offer special loans with lower interest rates. Be sure to compare these offers before deciding.
Tip: Always compare interest rates from different lenders, as even a small difference can lead to big savings over time.
During the festive season, every bank and NBFC (Non-Banking Financial Companies) roll out special Diwali offers on personal loans. These offers can include:
Lower or no processing fees
Discounted interest rates
Pre-approved personal loans
Make sure to check your bank’s website or mobile app for any Diwali-specific loan offers. Additionally, some banks may provide cashback offers or gift vouchers as part of their festive promotions.
The loan tenure is important because it affects your monthly payment and total interest paid. Shorter tenures mean higher monthly payments but less total interest, while longer tenures lower your monthly payments but increase total interest over time.
If you want lower monthly payments: Pick a longer tenure (up to 5 years).
If you want to pay less interest: Choose a shorter tenure (1-2 years).
You can pick a tenure that fits your income and ability to pay back.
Use the EMI Calculator here for personal loan
Sometimes, you might want to pay off your loan early, either by making extra payments or paying it off completely. However, many banks charge a fee for early repayment.
Here are important things to check:
Prepayment penalty: This is a fee if you pay part of the loan before the end. Make sure your lender either doesn’t charge this fee or has a small charge.
Foreclosure charge: If you want to pay off the loan completely early, check if the bank charges a fee for that. Some banks might not charge this fee during Diwali as part of their special offers.
When choosing a personal loan, it’s important to consider processing fees and other hidden charges that can increase the cost of your loan. Processing fees usually range from 1-2% of the loan amount and are charged at the start.
Here are some common hidden charges to watch for:
Processing fees: Check that the processing fee is fair. Some lenders might waive or reduce fees during Diwali.
Late payment penalties: Be aware of any charges if you pay your monthly payments late.
Before applying for a personal loan, it’s important to check the eligibility criteria set by the lender. These criteria typically include:
Age: Most lenders require applicants to be between 21 and 60 years old.
Income: Your monthly or annual income determines your loan eligibility.
Credit score: A high CIBIL score (750 and above) can get you better interest rates and terms.
Employment status: Salaried employees and self-employed individuals are eligible for personal loans, but the terms may vary.
Tip: If you have a high CIBIL score, use this to your advantage by negotiating better terms with your lender.
The lender you choose can make a big difference in your borrowing experience. Some factors to consider include:
Reputation: Choose a bank or NBFC with a solid track record for customer service.
Flexibility: Look for lenders who offer flexible repayment terms and convenient online services.
Customer reviews: Check online reviews and testimonials from previous borrowers to get an idea of the lender's service quality.
Tip: Opt for a lender that provides an easy and hassle-free online application process with quick disbursement times, especially if you’re in a rush for Diwali.
| Factor | Details |
|---|---|
| Assess Your Diwali Expenses | Create a detailed budget for shopping, gifts, home decor, and travel. |
| Compare Interest Rates | Fixed vs. floating rates. Lower rates during festive offers. |
| Look for Special Diwali Offers | Check for festive discounts on interest rates, processing fees, and cashback. |
| Choose the Right Loan Tenure | Balance between EMI affordability and total interest payout. |
| Prepayment and Foreclosure Charges | Ensure minimal or no charges for early repayment. |
| Processing Fees and Hidden Charges | Factor in processing fees, GST, and late payment penalties. |
| Check Your Eligibility | Age, income, employment, and credit score requirements. |
| Choose a Reputable Lender | Reputable lenders with good customer service and flexible terms. |
With careful planning and smart choices, you can use a personal loan to make this Diwali great. By comparing interest rates, looking for special Diwali offers, and understanding loan terms, you can find the right loan that helps you enjoy the festive season without worry.
A personal loan is money you borrow from a bank or lender that you can use for various expenses, like shopping or home renovations.
You should consider interest rates, loan tenure, processing fees, and any hidden charges before selecting a loan.
You can compare interest rates from different lenders online or ask financial experts for help (as us at support@eazybankloan.com)
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