What to Know Before Taking a Personal Loan
Personal loans are unsecured, which is why they carry higher interest rates (11–24% p.a.) than secured loans. They are best used for genuine emergencies or consolidating high-interest debt like credit cards, not lifestyle spending. Always check the processing fee, prepayment penalty and insurance riders – these can add 2–4% to the effective cost.
Frequently Asked Questions
What is a good personal loan rate?
Below 12% p.a. is excellent, 12–15% is typical, above 18% is expensive.
Can I prepay a personal loan?
Yes, most banks allow prepayment after 6–12 months with a small foreclosure charge.