Life gets calm and static as you approach to 40s and the main reason behind this is financial planning. Most of us get everything sorted till the time we enter in this age bracket, but the sudden need of cash or money make us look for the options. For example, the renovation work at home, any medical emergency, fee issue and more. At this time, the first thing comes to your mind is a personal loan. But, be cautious about the same.
In short, scroll down the blog post and read the things to remember when availing a personal loan in your 40s.
- Assess your Requirement
At this age, you are merely 15-20 years away from retirement and thus being a borrower is something that might not go well with times. So, double check the need and apply for the personal loan only if the requirement can’t be filled by making any other adjustment. Also, calculate the amount that has to be repaid as the personal loan should not cost on your monthly budget. This is important because you are required to save from now to enjoy a relaxed and financially independent retired life.
The personal loan is different from the home and car loan as the lender can’t put your asset to auction in case you fail to repay the loan. This is the main reason that makes it a bit costlier than the above-mentioned loans. So, in case of the salaried person, the eligibility ranks between 21 to 60 years while for the self-employed applicants the eligibility criteria range between 22 to 50 years.
- Compare and Choose
Another important thing to consider is the rate of interest that is being levied on the personal rate. So, don’t simply opt for your bank but also carry out proper research and check which bank offer the cheapest one and then make a final decision. Also, opt for the interest rate with a reducing balance and not the flat one.
- Understand Terms & Conditions
Go through all the terms and conditions thoroughly and check for hidden charges. Remember you are going to have a limited source of income and are approaching towards retirement. As you need to have bank balance to live an independent life without expecting something from the children or by being a burden on them.
You are suggested to think twice before opting for a home loan as your present income and age both will be considered by the lender at the time of sanctioning the loan amount.