What are the things that you should look while applying for a personal loan?

If there is one kind of loan that can serve multiple purposes, then it is the Personal Loan. Be it for a wedding, education, medical emergency, trip or any other purpose, a personal loan can serve you at the right time. Personal loan is ideal for any individual as it consumes only a few processing time, requires minimum paperwork and minimum or no guarantees. The loan is repaid in the form of equated monthly installments.

The Indian finance market has a wide range of personal loan options from different banks and financial institutes. With several aspects to consider while choosing the personal loan, people have to follow a certain checklist before choosing one. Here are a few tips that help people choose the right plan.

Interest Rate

One of the most important specifications in personal loans is the loan’s interest rate. People shouldn’t come to conclusion with information on the interest rate from just one bank. However low the interest rate is, don’t forget to compare the interest rates from multiple banks. There are several ways to do it, however, the easiest way to do so is by heading to Fincover which allows you to compare the top loan policies available in the country. There would definitely be a change in the interest rate; hence, people can find the best personal loan deal with the least interest rate by this means.

Fees

Apart from the Interest rate, there’s another aspect to be noted in personal loans. There are several charges attached to the loan plan from the bank. The common charges attached to personal loans are processing fees, late payment charges, loan cancellation charges, service tax, and cheque bounce charges. Like the Interest rate, the fees attached to the loan plan vary from bank to bank. Make sure to do comparative research on the fees attached to the plan you choose.

Flexible Repayment

Not at all times do people need the entire loan tenure to settle the loan amount. On certain occasions, people can foreclose the personal loan before the end of tenure; that’s when the banks charge people with pre-closure charges. Not all banks charge a preclosure fee, but some do at different rates. This preclosure charge must also be considered while choosing a personal loan.

EMI

Before choosing a loan, one must analyze their ability to repay the EMIs. Sites like Fincover provide the option of EMI calculator that can instantly give the EMI details for any particular loan amount that must be repaid. People are advised to make sure that the EMI paid does not exceed more than 50% of the income.

Apart from the points mentioned above, there are even more terms such as late payment penalty, tenure of the loan and customer service of the bank. Hence, make sure to analyze these steps before opting for personal loans.

FAQ

You can learn more from our asked questions

. What is a Personal Loan?

Personal Loan is an unsecured loan provided by banks or financial institutions to meet your current financial requirements such as wedding, education, or any other miscellaneous expenses.

What is the typical interest rate on Personal Loans?

Personal Loans are available at the interest rates of 10.5% and goes all the way upto 36%.

What is the repayment tenure for Personal Loans?

Most banks and financial institutions allow the borrowers to choose a tenure from 1 to 5 years.

How quickly you can get personal loans?

You can get a personal loan very quickly these days with so many fintech and loan aggregator sites available. Fincover allows you to apply for personal loans with zero documentation with instant approval.

How can I reduce the EMI on personal loans?

Normally, people who have credit score above 750 get a good deal for personal loans. Moreover, if you have a good relationship with bank you can negotiate for a better rate of interest.