Which bank should I choose to apply for a personal loan?
With most banks offering “personal loan apply online” features, you can avail of a personal loan from the comfort of your homes. Personal loans are unsecured loans that are easier to obtain because they need less paperwork and do not require a guarantee or guarantor. Some of the most common reasons for taking out a personal loan are repaying old debts, weddings or social gatherings, medical emergencies, clearing credit card bills, paying for holidays and so on. So, whatever your reason for looking for a personal loan online.
Here are some pointers to help you find the right bank for you:-
1) Compare interest rates offered by various banks: Perhaps a bank approaches you with an offer of "just 14% per annum" for a personal loan. Or you go to the bank where you have your savings account and discover that the interest rate is "just 16%". Regardless of how appealing the bank's offer seems to you, researching the personal loan terms of various banks and comparing interest rates is a vital move before deciding which bank to take a loan from. There are many ways to do this: you can do your research by visiting the websites of various banks and determining their interest rates, or you can see financial websites, which will provide you with all of the necessary details based on the criteria you enter.
2) Compare charges the bank levies: Interest rates are not the only things you need to compare when choosing a personal loan. You need to look at the various fees charged by banks while researching loans. The fees generally associated with a personal loan are processing charges, late payment charges, cheque bouncing charges, charges for loan cancellation before term and service tax for each service provided by the bank. The most important is the processing fee, which usually ranges from 1% to 3%.
3) Check for repayment facilities: The majority of personal loan products have complete and partial prepayment fees. This means that if you want to pay off the balance of your loan before the term is out, you'll have to pay a small fee. Few banks do not charge foreclosure fees, but most banks, like Personal loan at ING Vysya Bank, charge between 2% and 5% of the balance. This will help you minimise your total debt burden because potential interest payments are deducted, but it still costs you Rs. 10,000 to Rs. 25,000 on a loan of Rs. 5 lakhs.
4) Settle for an affordable EMI: Before you take out a loan, you must be sure that you will be able to make daily repayments to close the loan on time and without penalty. You will need an estimation of the equated monthly instalment (EMI) that you will have to pay on the sum borrowed for this. When you use an EMI calculator, you can quickly determine your estimated EMI. You can use any online EMI calculator to find loan sum, tenure, interest rate, processing charge, and prepayment options.
5) Check all available loan options: A personal loan is not always the only option for getting through an emergency. Approach friends and family to see if they can lend you money, especially if the amount is small. This way, you will avoid the hassle of paying additional fees to a bank. However, you should be aware that having monetary transactions can often destroy relationships. So, if you take out an interest-free loan from a family member, make sure you pay it back on time to prevent strain in your relationship.
Aside from the above factors, you will also want to understand the penalty for late EMI payment, the reputation of the bank from which you are borrowing, the bank's customer service, and the loan's tenure. Whatever decision you make, keep your financial goals and capabilities in mind. No matter how bad the emergency seems, it is not smart to give way to another crisis while getting out of one.
Must Read:- Personal Loans Have High Interest Rates
