How to compare and apply for the best personal loans

impact based on your choice.Now the question is that on which parameters someone can evaluate various loan providers? Yes, we are going to tackle this question for you today.There are some things which you should keep in mind when you are comparing loans from various Banking institutions/NBFC’s.Remember we can only assist you but, the final decision in this matter really needs to be yours.

There are a few factors based on which you can compare loans from various lenders. Here they are:

Loan Amount:

Different bank authorities have decided a range that they can provide to the individual as the personal loan.It is a good idea to ask a loan provider about their maximum and minimum personal loan disbursement amount for a loan. Eg, if you need a low amount loan, then you should look for the loan companies whose range start from a fairly low amount of money.Although the loan amount depends on various factors but on a high level the amount is as high as 24 lakhs.

If you need a high personal loan amount then Indiabulls should be in your list.

Interest Rates:

When it is about paying back money, how can we forget about loan rates?Interest rates are different for each financial institution and hence it is important to look for an institution which offers best rate of interest.It’s very evident that everybody needs low-interest rates so that they do not have to pay off hefty amount as interest.

It’s easy to check interest rates of a lender or a financial institution. You just need to Google or logon on their official site.It is important to know that whatsoever is written on the financial institutions website may not be 100% true for you because your actual rate will be dependent on your multiple factors.For Example, if you have a strong financial statement and no credit card defaults then chances are you’ll get a best rate of interest from the bank.The average interest rates range from 11% to 35% based on your credit history

Processing Fees:

Besides the rate there are additional charges which bank charges to process the loan application form. The fees also known as processing charges.The percentage of the processing charge is same for every client for a particular bank but, percentage may change from bank to bank and financial institutions.

Let’s say, when you are applying for Rs 6 lakh as personal unsecured loan from a financial institution whose processing fees is 1.5Percent, then you will have to pay Rs 9,000 as service or processing fees.The percentage of processing fee ranges up to 2.5Percent of the loan amount.Processing fees should be in your checklist while finalizing a bank or a financial institution for a personal loan.

Eligibility Terms and conditions:

Becoming eligible for a unsecured loan is the basic requirement to get a personal loan.There is no point even looking at getting a personal loan if you’re not eligible for it.It is really a good idea to check 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 one’s research and time if you will apply without checking eligibility as it can end up being the cause of loan rejection. So, research in this particular section thoroughly.

Paperwork

No one likes to do a large amount of documentation but, you have to submit some basic documents for getting the personal unsecured loan.The list of documents also may differ as per the lender.Many times we come across a situation when we don’t have the proper documents at the right time.So, our suggestion is that you just consult with your loan agent or inquire about documentation from your bank or NBFC at the initial stage.

Payoff Option

I generally stay away from taking personal loans because it gives me a stress to repay a certain amount each and every month.Repayment of the instalments has become one of the nightmares of borrowers. There ae options to step up the payment, step-down the payment and part repayments from loan companies which makes it simpler for customers to repay the loan EMI’s without defaultingOne must check the equated monthly installments and his compare it with the paying capacity.Check with your lender for type of repayment options they have got. This will make your life easy

Tenure

The number of equated monthly installments to be paid are depends on the duration of repayment in any loan.If your salary does not allow to pay the loan EMI’s in a timely manner then it would be better to either reduce the loan amount or increase the tenure of the personal loan.Some financial institutions give you the power to decide the repayment duration depending on your financial condition.Most of the time there are offers available from loan companies where they provide special rate and option to choose duration. You can find information on discussion forums and Q/A websites such as Quora.

Default Charges

Everyone wishes to pay the loan EMI on time but, sometimes they are not able to do it due to whatever reason.To make default as low as possible, financial institutions 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 loan company may or may not impose a penalty depending on their terms but usually banks and non-banking financial institutions do charge this amount.

Life is uncertain and therefore it is important that even if you think that you will pay all the EMIs in timely manner, you must check on the penalty charges which the bank will take when there is a delay in the installments.We have seen in the past that people like Vijay Mallya and Nirav Modi have created headlines for bank default. It has shown that Loan Company is always at a huge risk while giving a personal loan and hence they apply some penalty charges on default payments.

As we told you earlier, the charges may vary from bank to bank as well as dependent on your rate and days you have defaulted. All these points are really easy to find on the financial institutions website or the application form which you fill for the loan.Interestingly, most people are not aware about these things and sometimes just don’t even care(I would call that as carelessness).

They think that the most important thing is to have the loan quickly.However as an aware customer, we should research the right way beforehand.