Choosing a personal loan lender is a crucial step in personal loan application process. It is very important to opt for the right lender for smooth functioning and processing of personal loan. Individuals need to compare the interest rates, loan amounts, eligibility criteria, processing time, fees and charges etc. of multiple lenders and opt for the one providing with the best offers and services. This requires a lot of research and understanding. Therefore, it is essential to know the major factors that should be considered while opting for a personal loan lender.
Key Factors To Consider While Selecting a Personal Loan Lender
Interest Rates
Personal loan interest rate determines the overall borrowing cost of the borrower. A low interest rate results in lower EMIs and eventually lower interest cost, and vice versa. Individuals planning to avail personal loans should compare the interest rates offered by various lenders before finalizing the bank/NBFC. They should also check for pre-approved offers with the banks/NBFCs with whom they already have a savings/current/loan/FD account or have availed a credit card. Some lenders offer preferential interest rates for their pre-approved customers. They should also visit online financial marketplaces like Paisabazaar and compare the interest rates offered by various lenders and opt for the one offering the lowest interest rates.
Turnaround Time
Lenders usually take around 2-7 working days for loan disbursal. Some lenders also offer disbursal within 24 hours or a few minutes. Lenders offering pre-approved personal loans offer instant loan disbursal in just a few seconds. It is advisable to opt for lenders offering quick loan approval and faster disbursal, preferably instant disbursal, to prevent any delay in loan processing.
Processing Fees and Other Charges
Applicants should check the processing fees, prepayment/foreclosure charges, penal interest, etc. before choosing a personal loan lender. Fees and other charges also affect the overall borrowing cost of the borrowers. Therefore, one should check for all the additional charges with the lenders while availing a personal loan.
Loan Amount
Individuals should calculate the total loan amount required and opt for lenders offering substantial loan amount falling within their limit. Some lenders also offer personal loan overdraft facility wherein the personal loan borrowers can withdraw funds from the loan account as per their sanctioned credit limit and the interest is charged only on the amount used. Top-up personal loans provide additional funds to existing personal loan borrowers to meet their financial needs. Individuals planning to avail personal loans should check for the aforementioned facilities to avail more funds to meet their personal expenses.
Eligibility Criteria
Lenders usually set their personal loan eligibility criteria based on the credit score, age, monthly income, employment profile, employee profile, EMI/NMI ratio, etc. of the applicants. Before applying for a personal loan, individuals should check whether they meet the eligibility requirements of the lender or not, failing which might lead to loan rejection.
Conclusion
Selecting the right personal loan lender affects the overall financial well-being of the borrower. Therefore, it is essential to consider the above-mentioned parameters while searching for a personal loan lender.
