Points To Tick Off While Taking A Personal Loan

By Author: Aditya
Total Articles: 2
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The decision to take a personal loan is a huge step in anyone's life. As with this decision comes lots of liability. Now, when you have decided to take a personal unsecured loan, it is time to find the right bank or financial institution.
No one will guide you to the right bank or lender which is best suited for your loan needs. The market is full of financial institutions with plenty of exciting offers but, you need to be very cautious while choosing an option as this is not merely another shopping.
Your selection can have impact on your dependents and other relatives, and that is why you can't take this lightly. But, how would you make a choice between these banks, financial institutions and personal 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 comparing loans from various Banks/NBFC's. Please remember we can only guide you but, the final selection in this matter really needs to be yours.
There are various factors based on which you can compare personal ...
... loans from various loaners. Here they are:
Lending Amount
Various bank authorities have decided a range which they can provide to the consumer as the personal loan. You should compare the amount ranges and select which benefits you the best. For instance, if you need a a very small amount of loan, then you must find a financial institution which offers lower amounts. You'll find a few options when you are looking for high amounts say like , Thirty lakhs.

If you need a high personal unsecured loan amount then IDFC first bank personal loan should be in your list.

Interest Rates

The next thing you should compare is the interest rates offered by multiple loan providers. Who would like to pay more when there are choices available for lower loan rates?

You can check the rates offered by loan companies online but, it's advisable to go and ask for rate of interest yourself. 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 of interest will be dependent on your various factors.
For Example, If you have a strong financial statement and no credit card defaults then you might get a lowest rate from the loan provider. The average loan rates range from 11% to 35% based on your credit history

Processing Charges:

The applicants has to pay some other charges to the bank in case of loans because loaners give these loans without any security in lieu of the amount borrowed.

The fees also commonly called processing charges. It is the lender which decides on the rate of the processing fee to be charged from the consumer.

Let's say, when you're applying for Rs 6 lakh as loan from a bank whose processing charges is 1.5Percent, then you will need to pay Rs 9,000 as service or processing charges. Processing fees % is mostly between 1.5Percent to 2.5% of the disbursed amount. Processing fees should be in your checklist while finalizing a bank or a financial institution for a personal loan.

Eligibility Conditions:

Becoming eligible for a personal unsecured loan is the basic requirement to get a personal loan. There is absolutely no benefit of selecting a specific loan if you're unable to complete its eligibility terms.
It is really a good idea to check your eligibility on the banks website so that you know the basic requirements, and would you be able to comply with these or not.

It will likely be wastage of your research and time if you will apply without checking eligibility as it can end up being the cause of loan being rejected.

You may also like to read Things to keep in mind before applying for a persoal loan

So, our suggestion is to carry out the checks on this first.

Necessary Documents

Nobody likes to do a lot of paperwork but, you need to submit some basic documents for getting the loan. Papers required by lenders are mostly similar but may have differences as per the bank and your history of credit.
Sometimes we all come across a situation when we do not have the proper documents at the right time.
So, peaking into documents section of financial institutions will give an idea of what is needed.

Payoff Option

I usually avoid taking personal loans because it gives me a stress and anxiety to repay a specific amount each and every month. One of the nightmares of the loan customers is repayment of the monthly installments. To solve this issue, banks have flexible instalment options.

One must check the equated monthly installments and his compare it with the paying capacity. Consult with your bank for type of repayment options they have. This will make your life easy

EMI Tenure

EMI calculators can be found on all loan providers website to calculate your EMI amount based on simple inputs like amount, interest rate and loan tenure. When your salary does not allow to pay the EMIs before its due then it is recommended to either reduce the personal loan amount or increase the duration of the personal loan.
Almost all loan companies will assist you to choose the payment term depending on your bank statement and monthly salary. Let's say, you can select a flexible duration ranging between one to five years while taking Capital First personal loan. You can find information on community forums and Q/A websites such as Quora.

Default Charges

Every person likes to pay loan EMI's on time but, sometimes they're not able to pay it because of any reason. To make default low, financial institutions charge penalty fees for not paying the equated monthly installments by the due date. 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 words but usually banks and NBFC's do charge this fee.

You have to research and do a comparison of the loan offers on this basis no matter how much optimistic you are about your punctuality or repayment ability.We have witnessed in the past that people like Mr Maallya and Nirav Modi have created headlines for bank default.
It has shown that loan company is always at a huge risk while giving a loan and for that reason they apply some penalty charges on default installments like I mentioned, the charges will vary based on your default time period, rates and also the bank who has lended you the money.

Most of these factors are generally made transparent by loan companies before providing the personal loan.Generally, people ignore points at the time of loan application and pay the price when time comes.

They think that the most important thing is to have the loan as early as possible. Simple homework of 2-3 hours is what you need to find all kinds of things about these things. This possible if you research several sites of banks and financial institutions.

Your Loan Advisor is best Advisor in market for best advice and solution for Personal loan. You can also check Points to consider while taking a Personal Loan.