Why you should avoid personal loans with high processing fee, low rate

To lure borrowers, some lenders may keep interest rates low but charge a high processing fee

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• With quick approvals, no collateral requirement, no restriction on end-use of funds and pre-approved offers, personal loans can be helpful in emergencies
• A personal loan at the lowest interest rate may not always be cheaper. Along with interest rate, check the processing fee a bank is charging
• If you are taking a Rs 100,000 loan for one year at 15 per cent, your interest outgo will be Rs 8,310. If the lender charges you Rs 3,000 as processing fee, your total outgo will be Rs 11,310. If you look at it another way, you have paid 20.25 per cent interest on your