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A personal loan is a convenient financial resource that you can depend upon whenever you need funds. It is easy to qualify for and is offered by almost every financial institution. But how to choose the best one for you?
Here are some tips to select the personal loan that can benefit you the most:
Evaluate the Interest rates
Getting an affordable interest rate is important as even a small percentage difference can have a significant contribution to the total cost of the loan over a period of time. Among banks, interest rates can differ significantly. Do your research and compare the interest rates offered by different banks. This can be easily done online. Keep in mind that banks offer different rates to different customers depending on factors like personal income and the relationship of the applicants with the bank.
Consider the eligibility criteria
When opting for the best personal loan in the market, go for a lender offering simple and easy-to-meet eligibility criteria. This will help reduce the effort needed to acquire funds and speed up the verification and approval process.
Here are the general eligibility criteria for availing of a personal loan:
Enquire about additional fees and charges
Avoid picking an option simply based on a low personal loan interest rate. Before finalising the personal loan scheme, check for any fees or processing charges, bounce charges, penal interest and other fees. Some institutions may charge high fees, causing you to end up spending more than you intended to. You can take the help of a personal loan calculator to help you determine how much you would be ending up paying.
Check the documentation requirements
The ideal personal loan schemes are the ones that come with the least amount of conditions and disclaimers. For example, if you urgently need cash, the last thing you would want is to fill up a lot of forms and submit too many documents. Take the time out to check the documentation requirements while checking out different personal loan schemes.
Ensure repayment flexibility
For the best borrowing experience, look for a flexible repayment tenure. This will let you spread out your EMIs over a suitable period for repaying the loan on the basis of what you can afford. You may choose to opt for a longer tenure to avail affordable EMIs and claim tax benefit. But do consider that the longer the tenure, the more interest you have to pay. You can opt for a shorter tenure while ensuring that the EMI stays well within your budget. Choose your vendor accordingly.
The above tips should help you choose the best personal loan for your needs. Get in touch with us to know more about IDFC FIRST Bank’s personal loan offering.
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