Comparing personal loans? Remember these 5 important points

Personal loans have become highly popular among Indians owing to the flexibility they offer and the ease of application and approval. As per a report, the number of personal loans in India surged by 50% between March 2021 and March 2022. As a result, several online tools have also emerged for comparing personal loans.

These tools allow you to compare personal loan rates offered by various lending institutions in India and choose the best deal. However, the interest rate should not be the only thing to consider when comparing personal loan offerings. Let's learn how to compare personal loans to get the best deal. 

Five personal loan details you must know 
 

Below are the five important parameters that you should look for while comparing personal loan options.

· Interest rate
 

The interest rate levied on your personal loan determines how much amount you have to repay to your lender. Personal loan interest rates can vary significantly from one lender to another, and hence, it’s crucial to look out for the best rate. Further, you should see if a lender is levying a fixed or floating interest rate. You can look at the comparison of fixed vs variable interest rates to make an informed decision.

· Loan tenure

Along with the interest rate, loan tenure is the other primary factor that determines the Equated Monthly Instalments (EMIs) that you have to pay for your personal loan. That is why you should not miss it when comparing personal loans. A longer tenure results in lower EMIs but increases your interest outgo, and vice versa. You should try to opt for the lender that offers the maximum repayment flexibility.

· Eligibility criteria
 

Not all lenders have the same loan eligibility criteria for providing personal loans. Further, the eligibility requirements of banks are a bit different from that of Non-Banking Financial Corporations (NBFCs). Thus, it’s prudent to look at the loan eligibility norms of different lenders when comparing personal loans. This will help you apply for a personal loan with a lender that’s most likely to approve your loan application.

· Loan amount
 

Depending on your eligibility, lenders decide the maximum loan amount that you can borrow from them. Different lenders will provide you with different loan limits as per their internal policies. It’s better to opt for a lender with the highest loan amount so that you can easily meet all your financial requirements.

· Fees and charges
 

Lenders may levy certain charges on personal loans. These include processing charges, foreclosure charges, EMI bounce charges, etc. You should always consider the fees and charges of different lenders while comparing personal loans. Make sure to opt for the lender that’s asking for the minimum charges.

Also read - Debt consolidation for personal loans: What you need to know

​​To sum up 
 

You can consider the factors mentioned above while comparing personal loans to get the best deal. You can also look at the lender’s reputation and brand value to avoid any hassles in the future. With IDFC FIRST Bank, you can get personal loans at highly competitive interest rates starting from 10.49% per annum. 

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision