Six Things To Consider Before Opting For A Personal Loan

When a person needs a dynamic loan that has no limit on the ways it can be used for and is user friendly they go for a Personal Loan. It is one unique offering that helps in providing a lump sum amount of money that can be used by the borrower. The borrower is not bound to use the loan to purchase a car like in a car loan or consumer goods as in the case of a consumer good loan. This loan also offers loans with any collateral which makes it the most preferred type of loan in the country. Certain things have to be considered if you are going for this type of loan. Even minute differences can save you or cost you thousands. 

This type of loan mainly depends on the following factors -

• Principal Amount :
  It is the amount of money that the borrower is looking forward to borrow from the bank. The lower limit and upper limits of the amount that can be borrowed varies from bank to bank and also on the eligibility of the borrower. The interest is charged on this principal amount.
  
  
• The interest rate charged :
  The banks don’t just give out personal loan for free or non-profit purposes. The banks charge a sum of money known as interest on the principal amount. This interest is not to be paid apart but is included in the EMI’s (Equated Monthly Instalment). These rates vary from bank to bank and person to person depending upon the bank’s policies and borrowers eligibility. A bank may charge higher interest rates if the loan is not secured.
• Tenure of the loan :
  The tenure means the time limit for which the loan is needed. This is important as the interest charged by the bank depends on that. Different banks have different minimum and maximum tenure limit. The longer tenure of the loan may attract higher interest rates.
  
  
• Credit Score :
  A credit score is a three-digit code that ranges from 300 to 900. It is the score that is given to the person depending on their earlier lending habits. A good credit score will attract a better interest rate from the bank.
  
  
• Collateral factor :
  This factor depends on the factor of risk. As most of the personal loans are not secured with collateral the interest rate is higher than usual. On the other hand, if any collateral can be provided to the bank of complete or partial value when compared to the principal it may attract a better deal for the borrower.
  
  
• Miscellaneous factors :
  There are also some miscellaneous factors like age. Many banks offer personal loan to people of or above the age of eighteen and also some offer personal loans to individuals of age twenty one or above.

Thus these six points have to be considered while opting for a personal loan so as to get the best possible loan offered to you. Indian Bank personal loan is an offering by the bank in the personal loan segment. The bank offers loan amount of up to 20x times the gross monthly salary of the applicant. The loan tenure that they offer is up to 7 years and can be paid back in easy monthly EMI’s. The bank has been offering one of the fastest and easiest personal loan approval processes for years now and is trusted by lakhs of people in the country. They also have special schemes for pensioners and defence personnel.

Conclusion -

A personal loan of being such dynamic in nature demands to consider some other factors into consideration before opting for a personal loan. These factors not only can save you thousands of your hard-earned money but also ensure you get the best possible offer for your convenience.

Also read this: Things to consider before applying for a personal loan in India