Tips to Choose the Best Bank for Personal Loans
Personal loans are unsecured loans, which are easy to qualify for and can help you cover a wide range of needs. The most common reasons to get a personal loan include:
- Paying off credit card bills
- Home renovation
- Wedding or any occasion in the family
- Debt consolidation
- Emergency medical expenses
- Purchasing a critical home appliance
- Planning a vacation
Major financial institutions in our country offer a variety of loans. But, which bank is best for a personal loan? Apart from looking for a higher personal loan limit, here are some other factors to look for which choosing a lender.
Tip #1 Look for Competitive Interest Rates
When you are looking for a personal loan provider, you have to compare loan interest rates. You can do this by visiting their websites. Choose competitive interest rates, which don’t derail your monthly budget. Remember, that you can get a lower interest rate if you have a sustainable income, and good repayment history. Your credit score will be used by the banks to evaluate your creditworthiness. Use the bank’s loan EMI calculator to find out your monthly instalment amount based on loan tenure, the amount borrowed, and the interest rate. You need to choose an EMI that you can afford.
Tip #2 Opt for A Completely Online and Paperless Process
Choose a bank that lets you apply for a personal loan online. A digital KYC process can offer you a convenient and seamless experience. When you need urgent funds, the last thing you might want to do is fill in extensive forms and visit a bank branch for approval.
Tip #3 Look for Flexible Loan Tenure
Simplify your life with flexible loan tenure for personal loans. Look for tenures ranging from 12 months to 60 months, so that you can repay the amount in a stress-free manner, and minimise the chances of default. Remember that interest rates for shorter-term loans could be lower than those with longer repayment period. Look for a bank that will let you make up to 40% part payment to reduce your EMI burden.
Tip#4 Check for Eligibility Constraints
Many banks might offer loans at lower interest rates, but you might not qualify to apply for them. Take a look at age limit for applying for a personal loan, based on whether you are salaried or self-employed. This will speed up the process, and you can get the funds for urgent needs.
Tip #5 Balance Transfer of Existing Personal Loans
You might want to be able to transfer your existing personal loan or outstanding credit card debt taken from another bank. This will reduce your EMI burden in case the bank offers you a lower interest rate.
Tip #6 Enquire About Additional Fees
Before opting for unsecured loans, check for additional fees, apart from interest rates. Many banks might charge more fees, and you might end up paying more than you intended. Consider charges like processing fees, penal interest, bounce charges, etc.
Look for a lender that offers seamless digital experiences and high repayment flexibility. Choose a bank that has a reputation for dedicated customer service.