5 Reasons To Look For While Comparing Personal Loans
Personal loans are the easiest and quickest way to deal with a financial crisis. You can apply for personal loans at any NBFC or financial institution. Many online money lending companies also provide quick personal loans as per your requirement.
Nowadays, individuals no longer need to go to a private lender and deal with a huge amount of interest. Personal loans ensure you do not have to pledge your assets to get the money. All you need is a good credit score and a regular source of income.
Still, you should research and choose the best financial institution for your personal loan. There are some key factors that you should remember while comparing loan offers. Let us find out in detail.
Prompt Quick Personal Loan Disbursement
Personal loans are usually considered during an emergency for an urgent need of funds. A quick personal loan can help you meet your financial requirements. While dealing with and comparing offers, your focus should be on the lenders who provide loans with minimum documentation. The main objective of a personal loan is to get quick funds. Unnecessary form filling and documentation can delay your loan process. These days, banks and NBFCs provide loans with minimum documentation. Many small financial institutions can help you with a custom-made loan offer. It usually takes a few minutes to verify your eligibility, and money gets transferred to your account within a few seconds. The only documents you should have are:
- PAN number
- Aadhar number
- Age proof
- Proof of income
Thanks to the new digital processes, all other verification automatically gets completed within a few minutes. So, while comparing your loan offers, look for the lender who provides loans without hassle.
Total Loan Tenure
Always give due importance to the loan tenure while considering any offers, as it dramatically affects your EMI. Loan tenure is the total time you intend to repay your loan amount, including interest and other charges, such as processing fees, administration fees, etc.
So why is loan tenure so essential to take into consideration? Suppose you borrowed INR 2 lakh from a financial institution with a 14% annual interest rate for three years. Your EMI will come to around INR 7000. Now the same loan if you agree to extend the tenure to 5 years, your EMI will be around INR 4500. So, overall, you will pay more interest in the five years of the loan tenure.
Lowest Personal Loan Interest Rates
Personal loan interest rate is an important aspect you should look for while comparing any loan offers. The total interest amount is the extra charge you will pay with your capital amount. So, always consider the lowest personal loan rates, as higher rates increase your EMI.
Interest rates can also vary upon your CIBIL rating and insurance filings. Usually, it can be between 7.9% to 49% per year, depending on your lender (considering both banks and NBFCs). So, choose your lender carefully while comparing any loan offer.
Check Out for Flexible Repayment And Other Hidden Charges
Always compare your loan offers in terms of the total payable amount. Apart from borrowed money and interest, there can also be other hidden charges. Some of these are:
- Processing fees
- Handling charges
- Late payment charges (if any)
- Administrative charges
- Legal and recovery charges
One more thing you should always look for is a flexible prepayment option. Generally, banks and financial institutions charge a penalty if the borrower wants to repay the plan before the loan ends. The hidden charges can be between 0.5-2.5% of your loan amount. So, keep in mind every minute detail before making the comparisons.
Go Through All Terms And Conditions Carefully
Investors usually do not spend much time reading the terms and conditions section while accepting any insurance or loan offer. Every financial institution has its own set of rules and regulations. While comparing the offers, you must go through the terms and conditions of every lender. The relationship between the lender and borrower should be clear and transparent. Any missed point may create a huge issue later and lead to the deterioration of your credit score. So, always read the T&C section thoroughly.
Quick personal loans are the best option to fulfil your urgent requirement for money. No collateral, no-hassle while applying, and quick dispersal should be the ideal loan offer.
So now that you know the key points to consider while deciding on personal loans, spend some time comparing different lenders based on these points and make a well-informed decision.