How to Select the Best Personal Loan Borrower

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.

LendersInterest Rate (p.a.)
State Bank of India10.00%-13.75%
HDFC Bank11.00%  onwards
Punjab National Bank8.80% – 15.35%
ICICI Bank10.50% onwards
Bank of Baroda9.20% – 16.55%
Union Bank of India9.80% – 13.90%
Axis Bank10.25% onwards
Bank of India10.25% onwards
Indian Bank9.40% – 10.90%
Kotak Mahindra Bank10.99% onwards
Central Bank of India10.75% – 10.95%
IndusInd Bank10.49% onwards
IDBI Bank9.50% – 14.00%
Indian Overseas Bank10.90% – 11.90%
Money View15.93% – 30.00%
UCO Bank10.95% – 11.20%
Muthoot Finance14.00% – 22.00%
Navi Finserv9.90% – 45.00%
StashFin11.99% onwards
Fullerton India11.99% onwards
Faircent12.00% onwards
KreditBee12.00% onwards
MoneyTap12.96% 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.