Best Personal Loans – Important checklist to follow

Personal Loans – In a financial crisis, we generally rely on friends and relatives. However, if friends and relatives are unable to fulfill our monetary requirement one of the best options left with us is a personal loan. Personal loans are provided by banks or financial institutions. You can avail of a personal loan to fulfill your instant money requirements for any purpose. Personal loans are one of the most popular loan options as they are easy to avail and do not require much documentation.

Once you have made up your mind to avail a personal loan, the next challenging task for you is to find out the best personal loan.  It is quite confusing to find the best personal loan as you will find multiple lenders with lucrative offers in the market. Any laps in evaluating a personal loan will surely cost you more money. So, today let’s discuss important points to consider while availing of a personal loan.

Best Personal Loans – Important checklist to follow

Interest rate

The most important factor in selecting the best personal loan is the interest rate. You should opt for a personal loan with the lowest interest rate. By this, you can save a lot of money on the EMI. Personal Loans are generally offered in the range of 12 -20% interest rate.

Type of Interest Rate

The next factor you should consider before opting for a personal loan is the type of interest rate fixed or floating. If you are planning to repay a loan in a short time you should go for the floating rate option. In addition to this also check charges applicable for switching between fixed to floating and vice versa.

Also Read – 5 Best Banks for Personal Loan in India

Processing Charges

Processing charges is the next factor in the checklist. The bank also imposes processing charges for the loan application. You need to pay one-time lump sum charges for processing your loan application. This charge is in the range of 1-3% of the loan amount.

Prepayment Penalty

The next factor in selecting a personal loan is a prepayment penalty. Prepayment of loan helps us in reducing the EMI burden and we can close the loan faster. However, it is observed that few banks do not allow prepayment in a personal loan or they charge a heavy penalty for the prepayment of the personal loan. So, it is better to check the prepayment penalty before taking a personal loan.

Other Hidden Charges

Apart from interest rates few other hidden charges make personal loans costly. Some hidden charges applied on personal loans are documentation charges, duplicate statements, ECS processing, and account foreclosure charges. So, make sure to consider all hidden charges before taking a personal loan.

EMI Bounce Charges

If you default on EMI, a penalty is applicable to you. You should consider this charge while making a selection of a personal loan.

Tenure

The tenure of a personal loan is another important factor in deciding a personal loan. Personal loans are generally approved for a 12 to 60-month time period.

Also Read – Stay away from Personal Loan

Approval Time

Approval time is the time taken by the bank to process and approve your loan. It is a less critical factor for deciding personal loan. This factor makes sense if you are in urgent need of money.

Best Personal Loans

Best Personal Loan Comparison details are given below. Only Interest rate, processing charge, and prepayment penalty are taken here for the comparison.

Note – Interest rates and processing charges are subject to change. Request you to check at the respective bank for the current interest rate and terms and conditions.

Over to you –

Before taking a personal loan make sure that your need is unavoidable and can be fulfilled by only a personal loan. Because the higher interest rates of personal loans will put you under great financial pressure. Ask the following questions to yourself before taking a personal loan.

If you still decide to take the personal loan make sure to compare all the relevant features of a personal loan.