What are the things that you need to bear in mind when during personal loan comparison?
Go for the lowest interest rate:Personal loans are unsecured credits. As a result, lenders charge high-interest rates on them. The rate of interest offered to you will depend on factors like your monthly income, source of income, credit score, and such other. Even so, different financial institutions offer different interest rates. You can look around till you find even a small difference in the rates because that will ultimately translate into considerably lesser loan costs.
Consider additional charges:Loans involve processing fees, which come to 1–3 per cent of the loan amount. If you miss a monthly installment, you will need to shell out a penalty fee. In case you want to foreclose the loan, prepayment charges can be levied as per the outstanding loan amount. Before applying for a personal loan, find out the rates of such fees, and select the lender that offers the lowest rates.
Opt for the tenure that suits your repayment capacity:If you have a low repayment capacity, you might want to opt for an extended repayment period. It will reduce the amount of the monthly installment you need to pay. Do keep in mind that a longer tenure will ultimately lead to a higher amount of interest paid. This is another reason to look for lower interest rates during personal loan comparison if you need to pay lower EMIs.
Stay away from gimmicky offers:To lure customers, some financial institutions make promises of high loan amounts, lowest interest rates, and more. It is advisable to be wary of anything that sounds too good. Read the fine print carefully. These loans may eventually turn out to be more expensive. They might offer floating rates of interest, which appear low at the outset but increase significantly down the line.
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The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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