Getting a personal loan is very easy today. You can simply visit the website of the personal loan finance company and begin the loan application process. These loans are sanctioned with minimum documentation and the amounts are dispersed into the borrower’s accounts within 24- 48 hours or less.
Moreover, these loans are unsecured loans, which is why borrowers do not have to provide any collateral while taking out this loan. Both banks and NBFCs offer personal loans for an approximately 5-year tenure. Here are a few quick and easy tips to remember while choosing a personal loan provider.
Compare the interest rates: Before you finalize a lender, you must research the interest rates offered by various personal loan companies in India. After all, it is the interest rate that determines the money you would be paying on the principal loan amount.
Today, almost all lenders have a good online presence, which makes it easy to compare lenders. You need to just decide the loan amount and tenure you require and compare the interest rates offered by various lenders by conducting a simple Google search.
Consider the additional charges: According to unitedfinances.com, personal loan providers often levy several charges to process your loan request. These include the loan processing fee, fees for documentation, legal charges, and prepayment charges.
Most of these charges are levied by lenders as a percentage of the amount you take as a loan, which is why they can impact the overall loan cost. Therefore, it is essential that you consider all charges levied by different lenders. Ensure you read the fine print and check that there are no hidden charges taking the loan.
Check if you can afford the EMI: You need to repay your loan in monthly EMIs (equated monthly installments). This amount will be debited from your account until the loan is entirely repaid. All personal loan companies in India provide an online tool known as a loan EMI calculator that can help you determine the monthly payable EMI.
All you have to do is input the loan amount, interest rate and tenure in the corresponding tabs of the calculator. This is a freely available tool with no restrictions on usage and you can keep adjusting the interest rate and tenure until you arrive at an EMI amount your find affordable.
Check if the lender offers flexibility in repayment: Lenders profit only through the interest paid by the borrower. If a borrower prepays a loan before the stipulated tenure, lenders can incur a loss on their investment, which is why they levy a penalty for prepayment. However, if you think you can repay the loan before the stipulated tenure ends, it is best to choose a personal loan company that is flexible with its repayment terms.
So the next time you need to take a personal loan, you must keep these above-mentioned points in mind. This will make the loan application process easy and help you find the best lender as well.