November 12, 2020 Tips for Selecting the Right Personal Loan

A few tips on taking the right personal loan.

Less paperwork. Easy to obtain. Cost-effective. These are the best things about personal loans. Usually unsecured in nature, personal loans don’t require you to have a guarantor. Personal loans can be used in a number of ways. From financing that dream wedding to loan consolidation, there is so much you can do with a personal loan. However, it’s important to choose the right personal loan. Here are a few tips on taking the right personal loan.

Compare Interest Rates

Before taking any personal loan, compare interest loans. Look for a loan with a favorable interest rate. Don’t be fooled by attractive offers from your bank. Look at the amount you will end up paying by the time you are done with the loan. For insurance, a bank can try to convince you that an interest rate of around 14 percent per annum is attractive. However, at the end of the day, you might end up paying a lot of money. So, conduct your research. Use loan comparison sites.

Look At the Fees, Charges

Besides interest rates, it’s important to compare fees and other charges. Remember, fees can increase the amount you will end up paying. Look at the loan processing fees. Don’t forget to check the bank’s late repayment charges. Also, loan cancellation and service tax fees are important. So, don’t ignore them. In particular, look at the loan processing fee. This is the most important part of your loan. In most cases, this fee ranges from, 1-3 percent.

Repayment Flexibility

Another important part of the loan you shouldn’t ignore is the loan repayment terms. Most loans are associated with either partial or full repayment charges. What this means is that you can repay all your loans before its tenure. Here, you will end up paying a small fee. Whereas some banks impose 2- 5 percent foreclosure fees, others don’t impose any charges. So, it’s important to ask the bank representatives about these repayment terms.

EMI Affordability

Can you regularity repay your loan? Remember, failure to repay your loan can lead to extreme penalties. So, evaluate your financial muscle before taking a loan. Also, known as EMI, your equated monthly installment should guide you when taking out a personal loan. Choose a loan that is within your EMI. Use an EMI calculator before taking out a personal loan. The calculator should factor in different factors—including interest rate, tenure, processing fee, as well as an interest rate.

Look At Other Loan Options

Don’t take the first loan that comes to your table. Look at other possibilities. There are numerous options out there. So, don’t limit yourself. Don’t restrict yourself to a small loan. There are other loan options out there that can give you the right amount of cash to solve your financial issues.

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The Bottom-Line

Don’t take any personal loans. Choose a loan that suits your explicit needs. Compare interest rates. Look for a loan with flexible payment terms. Use the above tips and tricks to obtain the right personal loan.

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