In the time of financial instability either due to medical emergency, marriage, debt etc., it’s your friends/relatives who you turn up for help for short term money requirement. However not everyone can fulfill your demand everytime even if they have money to help you. This is because everyone has their own financial limitations and demands to meet. So during such time, the best solution is to get a personal loan from bank.
Now the question arises, how to find the best personal loan to meet your immediate cash requirement, as there are various lenders out in the market with attractive offers, various terms and conditions and hidden charges etc.?
Detailed research is the key when it comes to selecting best personal loan. If you do not consider these factors, you’ll end up paying more money from your pocket:
- Approval time: If you need money quickly, then look for banks offering speedy approval. There are many banks providing eligibility calculators on their website and approve your request online. You need to enter basic details such as name, city, contact number, employment details such as company name, income, and occupation type. Once this is done, their online system you will have to submit other requisite formality i.e. document submission. Post successful verification, you get eligible to get loan. For e.g. Bajaj Finserv approves loan in just 5 minutes.
- Interest Rate: This is the most important component of any type of credit application. A lowest interest personal loan helps in saving money on monthly EMI especially when the loan amount is high. With increasing competition, lenders are pushing various lucrative offers to attract customers and one of the way is charging low interest. Check out cheapest interest rates options here.
- Type of interest rate: When choosing a loan also check which interest is available i.e. fixed or floating interest rate. And is there any charge is involved on switching from one to another. Most importantly, calculate which option will save you more money.
- Faster loan disbursement: Instant online approval doesn’t mean instant loan disbursement. This is because, after the loan application is approved, banks take their own time to disburse the loan amount. If your money requirement is quick, then opt for a lender which guarantees instant cash.
- Pre-payment penalty: When you have excess cash in hand, you can use it to pay-off the personal loan. Benefit is your loan can be closed quickly and also your EMI will reduce which will help in saving money. However, check with the bank whether any charge is involved. Because for a bank, early closure of loan is loss making as they eventually earn less since loan gets closed earlier. Other option is part pre-payment which also saves you good amount of money.
- Other charges: Do not think that, it is just the interest rate which you will be paying. There are various other charges involved which borrowers are not aware of. And this mainly includes charges for – processing loan applicaton, duplicate statement, stamp duty, documentation, personal credit issuance, late payment, cheque bounce, failure in ECS processing, account foreclosure and others. So before selecting a loan, check all these charges and how much more money you will end-up paying.
- Loan tenure: If you think that paying-off loan is not possible in short period of time, then opt for a personal loan with repayment option ranging from 12-36 months or higher.
- Payment methods: It’s always beneficial to pay your EMIs on time to avoid late payment charges, impact on credit rating etc. Many a times, you may forget to pay EMIs even after having sufficient funds in hand. So best way is to look for a bank which offers multiple options for repayment such as ECS, credit card, cheque, cash etc.
But remember, granting a loan is at the sole discretion of the bank. And after any application for loan or credit card is made, banks will do a thorough check of the applicant to decide whether he/she is credit worthy or not. And they do this by checking your collecting records from credit information agencies such as CIBIL. They have record of borrowing and payment habits of an individual. A poor credit score, then chances of approval are dim. This is because a late or missed payment results in bad CIBIL score and for a lender such individual’s are risky.