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Various expenses such as a medical emergency, a wedding, child education or a high-value purchase may require you to avail a loan. Instead of covering it via a credit card, a personal loan may be a better choice. Unlike other types of loans, a personal loan is a type of unsecured borrowing which means you do not require to swear any asset as collateral.
Personal loans, in essence, can help you meet your immediate needs. However, it is essential to pick the right personal loan in order to avoid a financial mess. The key is to look beyond affordable premium, you should compare a loan product on several counts such as, late payment fees, foreclosure charges, and service taxes.
Things to Consider When Choosing the Right Personal Loan
Interest Rates:
You can get a personal loan from most of the financial institutions in India, and therefore a range of rates is in the offering. The most important point to consider before signing the documents is looking out for the most affordable rates. Comparisons can be smoothly done online.
Tenor:
The next most important point to consider is the duration of the tenor. While borrowers tend to go for longer tenors in order to avail affordable EMIs as well as claim tax benefit on a personal loan, this could prove counterproductive since long tenors could result in higher interest payment.
In order to secure a loan without unburdening yourself, you can use the personal loan EMI calculator to calculate the instalments that will go out every month. It is advisable not to borrow more than what you can pay.
Documentation:
Loads of documentation at a time of an urgent requirement is not at all a pleasing situation. That is why personal loans should be sought from a financial institution which requires minimal paperwork. Online banking has reduced much of the roadblocks in this regard. Besides, loan documents are filled with jargons which could prove difficult to comprehend. A financial advisor could assist you in this regard, which could help you avoid trouble.
Other charges that You Must Consider
Several charges such as a processing fee, EMI bounce charges or a late fee can be charged from the financial institutions when you avail a personal loan. A processing fee, for instance, is charged to cover some of the processing costs such as administrative costs and credit checks that are involved in the application and approval of your loans.
An EMI bounce charge is the penalty fee for missing an EMI payment levied by the lender, penal interest is the interest on late payment charged to you when you delay EMI payments or default on repayment. Online convenience secure fee is charged for online access to your loan account using a unique ID and password.
Foreclosure Charges:
If the borrower wishes to repay the loan before the loan tenure, the lender may levy a prepayment penalty, which is called foreclosure charges. Such charges vary from one financial institution to another and must be considered before deciding where to get a personal loan from.
Annual Maintenance Charges:
Another charge that should be taken into account. For instance, with Bajaj Finserv you can opt for a Flexi personal loan, where the annual maintenance charge is 0.25 per cent on the loan limit.
Personal loan Eligibility
In order to avail a personal loan, an individual must be between 23 and 55 years of age, be a salaried employee in a public or a private company, be a resident of India and have a minimum net salary.
Getting a personal loan if your CIBIL score is low (below 750) could be tricky. In that case, you can avail a personal loan by involving a co-applicant or a guarantor. The key benefit here is that if your lender finds the co-applicant or guarantor to have a steady income and a better credit score, they would be more inclined towards granting you a personal loan.
In order to figure out the right personal loan, a borrower must ideally do some basic research. While the interest rate may seem the most important metric, other hidden costs could increase the actual cost of the loan amount. Borrowers are suggested to decide on an optimum repayment tenor for their loan, understand all the terms given in the loan document thoroughly and keep in mind the personal loan eligibility before applying for a loan. Fulfil your diverse financing needs with an instant personal loan online. Bajaj Finserv Personal Loans available on Finserv MARKETS are a great option where you can avail loans up to Rs. 25 Lakhs, which can be availed by meeting minimum eligibility criteria and simple documentation requirement.
Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no cost EMIs to 4 hours product delivery, we work towards fulfilling all your personal and financial needs. What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App.
