How to Choose a Personal Loan
Posted on Friday, November 17th, 2017 | By IndusInd Bank
No matter your age, you probably have a bucket list of things that you would like to accomplish. More often than not, the only thing that might prevent you from crossing the items off your list is lack of funds. Whether it’s going on an international holiday, redesigning your dream home, or even providing for your child’s education, all these wishes require a substantial amount of funds. Well, this is where a personal loan comes in.
These days, a personal loan is a smart choice when it comes to acquiring what you want. Personal loans are extremely flexible as they are unsecured loans that can be used for any legitimate purpose and require no collateral.
Due to their popularity, there is a plethora of options in the market. But how do you decide which personal loan is best suited for you? We have come up with an easy and comprehensive checklist that can help you narrow down your choices.
Take a look:
Rate of Interest
The interest rate is one of the first things you should look at when opting for a personal loan. The rate of interest for personal loans vary from one financial institution to another. So, the key is to find the lowest interest rate on offer. The interest that you pay is also dependent on the loan amount and the repayment tenure that you choose.
Fees and Charges
Apart from the rate of interest, there a few other charges that you need to keep in mind. These charges include processing fees, foreclosure charges and so on. Every bank has different fees and charges, so you can compare these amounts prior to application.
Loan Processing Time
The loan processing time also differs from bank to bank. Check the documents required during loan application. The fewer number of documents, the lesser will be the personal loan processing time. You can also check with your bank as you might get a shorter loan processing time as an existing customer.
Many banks, like IndusInd Bank, offer an online EMI calculator where you can conveniently check the number of monthly instalments you would be required to pay. You simply enter your loan amount, your loan tenure and the personal loan interest rate, and the calculator provides you with the EMI amount and interest payable. By checking your EMI online before applying for a personal loan, you can easily plan your finances accordingly.
All banks conduct a credit history check before sanctioning any type of a loan. Your credit history determines your credit worthiness when you apply for a personal loan. The credit history includes information regarding any credit cards or loans that you have applied for, along with your repayment history and any defaulted payments. This complete information is represented in the form of a credit score, as given by Credit Bureau. Having a good credit score can bring you many benefits while applying for a personal loan, such as a higher loan amount, lower interest rates and quick loan approval. Not having any credit history is also not ideal. Here are a few ways in which you can maintain your credit score.
Armed with the points mentioned above and some careful research, you will be able to choose a personal loan that best meets your requirements.