How to Choose the Best Personal Loan Lender? - Loan Trivia

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Tuesday, 11 December 2018

How to Choose the Best Personal Loan Lender?

A large expenditure can come your way anytime. This can be owing to a medical emergency, urgent home renovation, social function, education expenses, or urgent travel-related needs. Such expenses can be rather large which may not be enough to be contained by your savings. This is when a personal loan can be of immense help. However, choosing the right lender is the most important part.

It is not tough if the right methods are used to inquire and compare the various lenders. Some of these parameters are as follows - 

1) Interest Rates

Interest rates are one of the biggest factors which determine the lender which people choose. This is because the lower the interest rate on a personal loan, the lower will be the installment which needs to be paid each month. Some of the other metrics which needs to be analyzed include - 
  • Paperwork requirements
  • Loan disbursal time
  • Ease of Application
  • Customer Care

2) Amount of Loan

You may not know how much loan is needed by you. You do not want the loan amount to fall short or borrow a loan amount that is far in excess and is not needed by you. This will lead to you paying interest on an amount that is not needed by you. This is why a number of prominent lenders offer the option of flexible loans which give you the liberty of paying interest only on the amount which is used. 

3) Prepayment Conditions

Every loan has a fixed repayment tenor by which the loan amount has to be repaid back. During the length of this period, there are chances that you may get a bonus or promotion which could allow you to prepay the remainder of your loan before the completion of the repayment period. Prepaying the loan amount leads to saving a lot on the interest.
Read More: Can I Get a Debt Consolidation Loan With Low Credit Score?

However, lenders charge a fee for foreclosure. This can turn out to a large sum. Thus, if you want to prepay, it is essential to confirm the penalties that are levied and look for a lender with the least prepayment penalties. 

Lenders these days offer personal loans of up to Rs. 25 lakhs which can be paid back in a tenor of up to 60 months. So, choose your lender wisely.
Must Read: Can a Salaried Person Avail Personal Loan Without Income Proof?

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