If you are considering taking a loan, then I must say that it needs to be a well thought decision. There is large amount of responsibility with this decision.
The very first thing which comes in mind after opting to go for a loan is the selection of a reputable and suitable lender. No one will guide you to the right bank or lender which is best suited for your loan requirements.
The industry is full of loan providers with plenty of interesting offers but, you will need to be very careful while going with an option as this is not merely another shopping.
Ways To Compare And Apply For The Best Personal Loans
Once you go with a loan company, you must understand that it is not only you but, also your family members can have an impact based on your selection. But, how would you make a choice between these banks, NBFC’s and private money lender?
In this blog, we will share our tips on how to compare and select the right lender for your personal unsecured loan.
There are certain things which you should keep in mind when you’re evaluating loans from various Banks/NBFC’s. Remember we can only assist you but, the final choice in this matter must be yours.
Let’s talk about the top factors which you should analyze before applying for a personal loan:
Amount of the Loan
Every loan provider or lending institution provides a different loan amount range which they offer as a personal unsecured loan to their customers. It is a good idea to ask a financial institution about their max and minimum loan disbursement amount for a loan, example, if you need a low amount personal loan, then you should look for the financial institutions whose range start from a very low amount. There are banks who offer as high as Twenty-five lakhs in a personal loan. You can select IDFC First Bank Personal Loan in this scenario.
Rates of Interest
The next thing you should compare is the interest rates offered by several loan providers. It’s very obvious that everyone needs low-interest rates so that they do not have to pay off hefty amount as interest. Nowadays, you can check loan rates provided by banks and financial institutions online however it is a good practice to ask with their agent.
It is important to know that whatsoever is written on the financial institutions website might not be 100% true for you because your actual rate of interest will be dependent on your various factors.
Example, If you have a past paying your credit card bills in a timely manner then chances are you’ll get a lower rate. The usual rate of interest ranges from 10% to 35% according to different lenders.
Becoming eligible for a loan is the basic requirement to get a loan. There is no point even thinking about getting a personal unsecured loan if you are not eligible for it. If you have not had a look at the eligibility on the banks site for loan, then please check it now.
If you do not do this in the first place, then chances are you’ll end up wasting considerable time and your energy. So, our advice is to carry out the checks on this first.
The borrowers has to pay some various other charges to the bank in case of loans because institutions give these personal loans without any security in lieu of the loan amount.
The fees also known as processing charges. The rate of the processing fee is same for each and every client for a particular bank but, percentage may change from bank to bank & financial institutions.
Example, if your approved loan amount is 2 lakh and the processing fees of the bank are 3%, then processing charges for you will be Rs 6,000.Processing fees percentage is generally between 1.5% to 2.5Percent of the disbursed loan amount. Processing fees should be in your checklist while finalizing a bank or financial institution for a personal loan.
I usually avoid taking loans because it gives me a stress to repay a certain amount on a monthly basis. One of the nightmares of the loan buyers is repayment of the EMI’s.
You will find multiple payment options with the banks to address this particular problem. If loan EMI’s is more than what you could pay off every month then, make sure you consider reducing loan amount. Talk to your bank for type of repayment options they provide. This will make your life easy.
No person likes to do a large amount of paperwork but, you need to submit some basic papers for receiving the loan. Papers required by banks are mostly similar but might have differences as per the loan company and your credit rating.
However, we do not have the right documents as per the needs and in certain cases share a different document that might not be taken into account by the lending bank.
So, our recommendation is that you just check with your loan agent or request documentation from your loan provider or NBFC at the initial stage.
Longer the loan duration, lower the EMI amount. If you think that your loan EMI is more than what you can pay then you should think about increasing your personal loan duration.
Don’t worry, your bank will definitely provide you an option to decide on your loan tenure but, it may have some dependency on the credit score.
For example, you can opt for a flexible tenure ranging between one to five years while taking HDFC personal loan. You can check out more such offers on the internet.
Every person who’s got the right intention will always pay his or her loan EMI’s by the due date. However, whenever there is any default, then that can be because of some unexpected reason.
To make default as low as possible, banks charge penalty fees for not paying the equated monthly installments on time. These will apply for banks, NBFC’s or any private lending company.
I would say that a private lending company may or may not charge a penalty depending on their conditions but usually banks and non-banking financial institutions do charge this amount.
You must research and compare the loan offers on this basis irrespective of how much optimistic you are about your punctuality or repayment ability.
We have witnessed in the past that people like Sandip Jhunjhunwala and Nirav Modi have created news headlines for bank default.
This has shown that lender is always at a big risk while giving a loan and therefore they apply some penalty charges on default payments .As we pointed out earlier, the charges may vary from bank to bank as well as dependent on your interest and days you have defaulted.
All these parameters are really simple to find on the loan companies website or the application form which you fill for the personal loan. It is just that we are not fully aware of these and their effect on us.
At the time of taking the personal loan, our goal is to get the amount fast. Our suggestion is to do a thorough research with at-least these shared factors before you apply for a personal loan.