What are the covenants and restrictive agreements that come with the personal loan?

When you take a personal loan in India, the lender may include certain covenants and restrictive agreements in the loan agreement. These are legally binding terms that you are required to adhere to, and failure to do so could result in penalties or legal action. Some common covenants and restrictive agreements that may be included in a personal loan agreement in India include:

1. Repayment Schedule: You will be required to make repayments on the loan as per the agreedupon schedule, which will be specified in the loan agreement.

2. Prepayment Penalty: Some lenders may charge a penalty if you choose to pay off your loan before the end of the loan tenure. This penalty may be a fixed fee or a percentage of the outstanding loan amount.

3. Collateral: Some personal loans in India require collateral, such as a property or car, to secure the loan. If you fail to make loan payments, the lender may seize the collateral to recover the outstanding amount.

4. EndUse Restrictions: Depending on the type of personal loan, the lender may restrict the enduse of the loan amount. For example, a car loan may only be used to purchase a vehicle, while a home renovation loan may only be used for home improvements.

5. Late Payment Charges: If you fail to make a loan payment on time, the lender may charge a late payment fee. The fee amount will vary based on the lender's policy.

It's important to carefully review the loan agreement and understand the terms and conditions before signing the contract. If you have any questions or concerns, you should contact the lender for clarification.