How to Win the Personal Loan Hunt?

Personal loan is quite a suitable option when you lack funds and are in real need, that may be for home renovation, debt consolidation or some emergency medical bill payment. It is an unsecured loan, hence you do not have to provide a collateral for the funds you borrow. However, when going for a personal loan, you may face difficulty when choosing between the various options. There are several lenders in the market and choosing the most suitable is important.

What are Personal Loans?

Personal loans refer to unsecured loans that let you borrow money for various reasons. There is variation in the amounts people need to borrow based on the purpose. Depending upon the lender, the interest rate and the repayment terms are fixed. Besides the lender and the borrower's needs, the lending of a personal loan also depends on the borrower's creditworthiness.

Choosing a Personal Loan

Here are the factors you need to study to win your personal loan hunt:

The Amount You Need to Borrow

You need to understand and evaluate the amount of money you would be needing to fulfill the requirement. When you are aware of the exact cost you need, you will be in a better situation to choosing the loan amount when borrowing from a lender and having discussions.

Interest Rates, Fees

When the interest rates charged by the lender are higher, the loan can be considered a costly one. You need to know the rate of interest charged, along with all other fees chargeable, to finalize the loan conditions and whether or not you would be going ahead with it.

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Eligibility Criteria, Documentation

When you are eligible as per the lender's policies, only then there is meaning in moving forward with the loan terms. So be sure to check your eligibility beforehand. When taking a personal loan, there can be variations in the documentation needed and the eligibility criteria.

Repayment Period Flexibility

You also need to understand in how much time you will be asked to repay the amount borrowed. Know how flexible the terms are and what suits you more. The tenure can be longer with smaller EMIs, or vice-versa. Depending on your ability to make the repayment, you will need to make a choice.

What's the Necessity to Compare Personal Loan Offers from Various Lenders?

There are various personal loan lenders in the form of financial institutions that are providing loans to those in need of them. The loan terms are different in case of every lender. You need to study the various aspects to choose the one that best suits your needs.

You need to compare various lenders and their personal loan offers based the following criteria:

Interest Rates

Of course, one would always want to choose the lower interest rate charged, as even a minute difference in the rate can bring significant change in the amount of EMI.

Pre-closure and Foreclosure Charges

Sometimes, the client is ready to pay some of the repayment amount ahead of the schedule. Such partial or full prepayment can also come with charges and you'll want to look for more flexibility.

Processing Fees

Lower processing fees is what one needs to prefer when choosing a personal loan from a lender. It is usually 2%-4% of the loan amount.

Digital Processes

Look for lenders who are offering online applications along with paperless documentation, as that can speed up the process and also keep it simple.

Disbursal Time

The process of disbursal of funds also needs to be taken care of. You need to be aware of how many days will be taken for the loan amount to reach you. Your purpose needs to be fulfilled, so prefer quick disbursals.

This way, based on the terms and policies of the varying lenders, while also keeping your requirements in mind, you will need to shortlist some financial institutions and finalize one from the list.

Also, you can always get a better deal by taking care of the following aspects:

• Your credit score
• Presence of a co-applicant
• By leveraging existing relationships
• Choosing a trustworthy lender with good reputation

Conclusion

Your personal loan hunt needs to be done carefully. That's because when you finalize a lender, you're not just getting the best rate of interest and other features, but you are also choosing a partner that will keep the borrowing easy as well as transparent.

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