Precautions

Before availing any loan a person should evaluate his needs/requirements and most importantly
whether he is in a position to manage within the available means or not.
Just because there is a discount in rate of interest and /or a concession in processing charges
which technically amounts to a few thousands only ,when one is required to pay back the loan
which is running in to lakhs a proper thinking is necessary. Secondly no decision be taken in a
hurry to book a flat just to avail discount as the house which one is going to buy is more or less a
one time investment, One should evaluate suitability, affordability etc.
If one decides to avail the benefits which are being offered ,one should go through the terms and
conditions of the offer such as the concession in processing fee is for this year only, is the bank
going to recover processing fees every year, how it compares with charges of competitors.
Secondly, try to understand how long the rate of interest concession will continue & for what
period ,is there any reset clause, Whether bank levies inspection charges if yes the amount which
one has to bear every year apart from interest and processing charges. After proper study one
should decide whether it is worth availing the discount offer.
By availing loan one should clearly understand that he is increasing his liabilities. A
mathematical exercise needs to be undertaken to have a clear picture of inflow of funds and
outflow of funds during the tenure of loan. Such an exercise should factor in expenses which
may be required to be incurred in the coming years as well, such as education expenses of
children, marriage of daughter /son, medical expenses of aged parents, or any ailing family
member. This will ensure that the budget will not go haywire and one will be able to meet the
repayment of loans without any tension
To sum up one should avail the discounts after evaluating what has been stated above.