BASIC INFORMATION WHEN YOU ARE GOING TO TAKE A LOAN

Basic Knowledge before loan application

There are few important things/basic rules to follow when taking loans,It's very important to have a right reasons for which you are taking the loan. 

 1-YOUR EMI MUST BE AFFORDABLE:  It's very important while you are accepting loan offer, you must compare your emi with your current net income, your total monthly emi should be less than 50% of your current net monthly income. 
According to economic time's any car emi should 15% of your net income, personal loan emi not more than 10% of your net monthly income, and total monthly emi should 50% of net current monthly income.
2- EMI SHOULD BE SHORTER: Borrowers mostly wish to go for long term loans because the EMI is lower and they enjoy tax benifit on the loan. But this is a wrong  strategy because they end up paying a huge interest on the loan.
According to economic time's "Long tenure is big burden of interest on customer .....suppose If you take a loan of Rs. 500000 at 9.% for 10 years, the interest will be Rs.260051/- . And if the tenure is 15 years then interest will be Rs.412837/- for a 20-year loan interest will be Rs. 579668/. In 25 years, the interest will be Rs.758791/- is 152% of the principal...short tenure is always best option.
3-TAKE INSURANCE ON BIG AND SECURED LOANS : It's very beneficial to opt insurance on loan while you're taking big/secured loan, since it's a choice, if bankers/lenders foreces for insurance linked with your loan, you may complain to ombasment.
4-TRANSFER YOUR LOAN IF REQUIRED: If required transfer your loan to the bank which offer at least 2% minimum less rate of interest compare to your current banker.... But
 A-don't do if you're about to close(if maximum tenure paid few tenure remains) your loan.&
B- Find details if any hidden prepayment charges on closing your loan....calculate all expenses.

5- CARE YOURSELF: It's common in our society that marriage and education are very important goals of children,parent will do anything to give their children best. Education loans are easily available, But nobody is going to give you a loan for your retirement needs. Taking an education loan will not only keep your retirement safe, but also improve a sense of  basic responsibility in the child, who has to repay it.