A personal loan is one of the most preferred financial tools in India. Today, there are many financial institutions, including banks, NBFCs, and fintech companies, that offer quick loans to address a range of financial needs. With such a wide range of options to choose from, you must know how to compare different personal loan options.
Whether you want to go the traditional way of submitting a loan application at the bank or the modern way of downloading the best loan app, you must check a few parameters in the loan offer, most importantly, the eligibility and documentation requirements. In addition to this, you must also compare the interest rate, processing fees, other charges, the lender’s reputation and the ease of reaching the lender. You must also read the terms and conditions while comparing different lenders.
Read on to know more about comparing different personal loan options:
Parameters to Check and Compare Different Personal Loan Options
1. Eligibility and documentation
When thinking of borrowing, you must first check your eligibility for a loan. Your eligibility for a quick loan depends on several factors like your age, salary, employment, credit score etc. Different lenders have different eligibility criteria. You must compare the eligibility criteria of different lenders and go for the one with the minimum criteria. You must also check that your financial profile meets the lender’s eligibility criteria.
You should also check the documentation requirements cited by the lender. Not being able to furnish the requested documents would result in loan rejection or a delay in loan processing. You can visit the lender’s website or download a loan app to check your eligibility and documentation requirements.
2. Value of financing
Different lenders offer varying loan sizes. Small-ticket personal loan options start from as low as Rs.10, 000. You can download the best loan app and apply for a small-ticket loan with ease. Loan apps can offer you a loan ranging from Rs. 10,000 to Rs. 1.5 lakhs.
For higher loan amounts, you can approach a bank or a non-banking financial institution. Many lenders may offer you a personal loan of up to Rs. 1 crore, depending on your eligibility. Thus, you must first figure out your loan requirement and then sort out the lenders offering you a loan of that size.
3. Rates and charges levied
Another essential parameter you must check is the interest rates and charges levied by the lender. These charges can vary from lender to lender and even a slight change can make a significant difference. The lower the interest rate, the lower your loan cost. It also means that your EMI would be lower and you could repay the loan sooner.
Many lenders may also offer you zero processing fees or a reduction in interest rate if you have an impeccable credit score. Make sure to explore all your options before selecting your lending partner.
4. Ease of Repayment
Quick loan options like personal loans must also come with tenure flexibility, which should allow a borrower to choose a repayment term as per their financial standing. Borrowing from the best loan app can offer repayment flexibility of up to 2 years easily. Personal loan tenures of longer durations are available too depending on the lender.
In addition to this, your lender must also provide easy repayment options including auto-debit and self-pay. The best loan app should send you constant notifications and reminders so that you don’t miss out on your EMI. It should also be easy to reach out to your lender in case of any discrepancies.
5. Time taken for approval and disbursal
Depending on the lender selected and the platform of financing chosen, the time taken for approval and disbursal of these loans varies too. Some reputed loan apps available in the market bring instant approvals within a few minutes with fast disbursals between 24 and 48 hours to enable quick financing, which can be beneficial for emergency funding of personal financing needs. Make sure to check your eligibility for the advances to make such quick loan availability possible.
Personal loans can help you manage your finances in a better and smarter way. However, availing a quick loan is a big financial decision and you must consider all facets before signing the papers. With so many lenders offering personal loans at attractive rates and offers, you must know how to compare the different loan offers and choose the right lending partner. Uninformed and reckless borrowing can land you in bad debt and impact your finances negatively.
Make sure to read the terms and conditions, understand the different terms associated with the loan and the obligations that will come with a personal loan. In addition to choosing the right lender, you must also choose the right tenure and sketch the right repayment plan.