Be careful of the cunningness of banks on personal loans and home loans; they secretly impose products, and understand the game of cheating here
Cross-selling in Personal Loans: Customers should be careful while taking a personal loan or home loan from the bank. These days, banks force customers to buy other products along with such loans. They give a credit card or an insurance policy. All this is called cross-selling.
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Cross-selling in Personal Loans: Every employed person usually fulfills their small happiness with salary only. Many of his small happinesses also come home on loan. In this happiness, he sometimes buys big electrical goods for his house, and sometimes he buys a car for his house. Many people take the help of a personal loan or other loans to fulfill their needs. Similarly, when you apply for a personal loan, you can be offered more than just the assured loan amount.
Financial institutions often use this opportunity to sell many other financial products like credit cards, insurance policies, or top-up loans. This is called cross-selling. These offers can be convenient and attractive. In such a situation, it is very important to understand the cross-selling by the banks. Sometimes this cross-selling proves costly for the customers.
Banks sell insurance policies in the name of giving loans
The simple meaning of cross-selling is that when you are buying one product, you are asked to buy another product along with it. For example, if you are taking a loan, you are sold insurance or a credit card along with it. Banks or finance companies try to increase their revenue through this. Along with this, one of their objectives is to maintain a strong relationship with the customers. Banks also sell insurance policies to customers in the name of loans.
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The bank gives you a loan and charges interest on it. The bank gives you term insurance so that it can protect its loan. It is a different matter that the bank also takes a guarantor for the security of the loan. As per the court order, it is also clear that along with the loan taker, his guarantor is also responsible for repaying the loan.
Cross-selling increases unnecessary expenses
Products sold through cross-selling can be beneficial, but it can also increase unnecessary expenses. For example, if you take insurance along with a loan, then you will have to pay extra money for it. On the other hand, if you are sold a credit card with it, then you will gradually start shopping with the credit card. This will increase your expenses, and you can also get trapped in a debt trap at some point.
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Customers should be careful while taking a loan
Talking to Live Mint, Nish Bhatt, Founder and CEO of Millwood Kane International, says that products like credit cards or insurance can be sold through cross-selling. Do not blindly trust such things. Ask the bank why such offers are being given. Pay attention to their hidden costs. Always read the fine print. If you are not careful, then another loan will be piled on your head unnecessarily. Anyway, a loan should be taken only where it is needed.
Complain if you are given a forced offer
According to RBI rules, no bank or financial institution can force you to buy a third-party product to get a loan approved. You can refuse these offers without any fear. If any bank still tries to sell you such products, then you can also complain about it.