Personal loans are great for financial crises and cash flow problems. With many banks and Non-Banking Financial Companies (NBFCs) offering and aggressively promoting various types of Personal Loans, such as regular Personal Loans, Instant Personal Loan, Pre-approved Personal Loan, Pre-qualified Personal Loan, and so on, obtaining a Personal Loan has become much easier and faster than it was a decade ago. However, making a hasty selection and failing to select the correct Personal Loan and lender might lead to future regret.
We will go over 4 methods to choose the Best Personal Loan Borrower.
Based on interest rates, compare different lenders
When looking for the finest personal loan, the interest rate is an important factor to consider. It has a direct impact on the amount of interest you pay and, as a result, the loan’s affordability.
The lender determines personal loan interest rates depending on criteria such as your credit score and repayment capabilities. Individuals with higher scores are often seen as more trustworthy. If your credit score is poor, lenders may offer you a reduced sanction or even reject your application.
|Lenders||Interest Rate (p.a.)|
|State Bank of India||10.00%-13.75%|
|HDFC Bank||11.00% onwards|
|Punjab National Bank||8.80% – 15.35%|
|ICICI Bank||10.50% onwards|
|Bank of Baroda||9.20% – 16.55%|
|Union Bank of India||9.80% – 13.90%|
|Axis Bank||10.25% onwards|
|Bank of India||10.25% onwards|
|Indian Bank||9.40% – 10.90%|
|Kotak Mahindra Bank||10.99% onwards|
|Central Bank of India||10.75% – 10.95%|
|IndusInd Bank||10.49% onwards|
|IDBI Bank||9.50% – 14.00%|
|Indian Overseas Bank||10.90% – 11.90%|
|Money View||15.93% – 30.00%|
|UCO Bank||10.95% – 11.20%|
|Muthoot Finance||14.00% – 22.00%|
|Navi Finserv||9.90% – 45.00%|
|Fullerton India||11.99% onwards|
Maintain repayment flexibility
Look for a flexible payback term for the finest borrowing experience. This allows you to spread out your EMIs over an appropriate repayment time based on what you can afford. You might pick a longer term to get lower EMIs and take advantage of tax breaks. However, keep in mind that the longer the term, the more interest you will have to pay. You might choose a shorter term while keeping the EMI well within your budget. Choose your merchant wisely.
Amount of the loan
Banks have maximum and lowest personal loan amounts that they can issue to a single applicant. As a result, before approaching a lender, you should be clear about why you want the cash and how much you require since, depending on your financial circumstances, the lender should be able to provide adequate funds at an acceptable rate of interest.
The loan amount may also differ based on your eligibility and credit history. As a result, it makes sense to evaluate different lenders based on the loan amount they give and select the one who can provide a suitable loan amount at an affordable rate of interest.
Inquire about any extra fees or charges
It is critical that you verify the fees in addition to the interest rate before deciding on a loan. These may be expensive depending on the lender, and you may wind up spending more than you expected.
Therefore, don’t choose a personal loan only because it has a cheap interest rate. Consider processing costs, bounce charges, penalty interest, and security expenses.