Why comparing personal loans is a great choice?

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Getting a loan is an important decision. If you have decided to take a loan then the next step is to find the right lender who can lend this loan to you. There are no rational experts who will guide you and advise the best lender for your personal loan as per your needs.There are numerous of options when considering banks, financial institutions and individual finances in the current market but, you should do your homework well as this will be a long term relationship.

This decision could affect the lives of many individuals and hence will need special attention and care.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 unsecured loan.There are certain things which you should keep in mind when you are evaluating loans from various Financial institutions/NBFC’s.We are just here to guide you but the decision is actually yours.

There are some attributes based on which you can compare personal loans from various financial institutions. Here they are:

 

Interest Rates

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When it is about paying back money, how can we forget about interest.Interest rates are different for each bank and hence it is essential to look for an institution which offers best interest.It’s very obvious that everybody needs low-interest rates so that they don’t have to pay off hefty amount of money as interest.

You can check the rates of interest offered by financial institutions online but, it is advisable to go inquire about interest rates yourself.However, the actual rate offered to you may differ depending on various factors.For example, If you have a history of paying your credit card payments by the due date then you could possibly get a lower rate of interest.The average rate of interest range from 10% to 35% based on your credit score.

Loan Eligibility

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First thing which a loan provider or an NBFC checks is your loan eligibility.If you’re not eligible then no bank or financial institution will offer you a personal loan. You might get a loan from a private lender with a higher rate of interest, that might put a hole in your pocket.It is really a good idea to check your eligibility on the banks website so that you know the essential requirements, and would you be able to meet these or not.It will be wastage of your research and time if you’ll apply without checking eligibility as it can become the cause of personal loan being rejected.

So, research in this particular section properly.

Lending Amount

Every loan provider or lending institution provides a different loan amount range which they offer as a personal loan to their customers.It is important that you check with the bank or the lender about the amount of personal loan they can disburse as a personal unsecured loan. Eg, if you need a small amount personal loan, then you should look for the financial institutions whose range start from a fairly low amount.You’ll find a few options when you are looking for large amounts say like , Twenty-five lakhs.

You can opt for Capital First personal loan in this situation.

Processing Charges:

The borrowers has to pay some additional charges to the bank in case of loans because banks give these personal loans without any security in lieu of the loan amount.

The fees also known as processing charges.The lending company decides the % of the loan as processing fee.

E . g ., if your loan is 1 lakh and processing fee is 2%, you’ll need to pay 2% of Rs 100,000 (i.e. 2,000) as the processing fees.The percentage of processing fee ranges up to 2.5% of the approved loan amount.Processing fees should be in your checklist while finalizing a bank or a financial institution for a personal loan.

You may like to read 10 tips for choosing a personal loan.

Necessary Documents

No one likes to do a large amount of documentation but, you will need to submit some basic documents for receiving the loan.Getting papers necessary for a loan really should not be complicated as it only require ones which we have got like Aadhar card, Tax proof and bank statements.Many times we come across a situation when we don’t have the right documents at the right time.So, peaking into documents section of banks gives you an idea of what is needed.

Repayment Options

Many people generally avoid taking loans because of the pressure of high installments. One of the nightmares of the loan buyers is repayment of the monthly installments.To resolve this problem, lenders have flexible installment options.One must check the equated monthly installments and his compare it with the paying capacity.Check with your bank for type of payment options they’ve got. This will make your life easy

Loan Tenure

The number of loan EMI’s to be paid are is dependent on the length of repayment in any loan.If you think that your loan EMI is more than what you can pay then you should think about increasing your loan tenure.Some banks give you the power to choose the repayment tenure according to your financial condition. Sometimes there are offers provided by financial institutions where they give special rate of interest and option to choose tenure You can find information on community forums and question and answers websites such as Reditt.

Default Charges

Every individual likes to pay the loan EMI on time but, sometimes they are not able to pay it because of whatever reason.To make default low, banks charge penalty fees for not paying the loan EMI’s by the due date. These will apply for banks, non banking financial institutions or any private lending company. I would say that a private lending company may or may not impose a penalty depending on their conditions but usually banks and non banking financial institutions do charge this amount.You need to research and compare the personal loan offers on this basis irrespective of how confident you are about your punctuality or repayment ability. The Penalty charges decided primarily because financial institutions also suffer from a loss due to your late payment. In that case, it is a way of ensuring safety from any loss by the banks.These charges may differ on the basis of loan providers, rates of interest, period of delay and so on.All these parameters are really simple to find on the banks site or the application which you fill for the loan.Interestingly, most people are not aware about these things and at times don’t even care(I would certainly call that as negligence).

They believe that the most important thing is to have the loan amount quickly.Our suggestion is to do a comprehensive research with at-least these shared guidelines before you apply for a loan.

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