More and more people are opting for personal loans to meet their various requirements and why not? Personal loans are not only easily obtainable but also allows the convenience of using the allotted fund for a wide range of reasons. Be it for a wedding ceremony, educational purpose or for buying a new home, a personal loan is always there for your varied needs.
The advantages one can get from a personal loan are also many. You can avail a highly flexible payment tenure at a competitive interest rate if you have a healthy credit score.
Obtaining a personal loan is also quite easy and simple, thanks to the minimum documentation and formalities involved. Since personal loans are unsecured loans, you do not even have to meet the condition of putting any of your personal assets as collateral for the loan security.
Moreover, with the help of a personal loan EMI calculator, you can even have a fair estimate of how much EMI you will have to pay for the loan over the agreed tenure. This way you can have a well-planned structure of payment without any confusion or unawareness.
Getting the right personal loan for you requires a thorough assessment of numerous factors. SOURCE: credit.com
The trickiest part of a personal loan, however, is to decide which personal loan option would be best for you. To help you overcome your indecision to some extent, here are few tips to decide the best personal loan option for you.
1. Interest Rates on the Personal Loan
The first and foremost thing to keep in mind while pursuing the best personal loan option for yourself is to compare the interest rates. The lower the interest rate the better it is for you.
A personal loan EMI calculator will give you a fair idea about how much of your money would go in paying the interest. A reputed lending institution will give you a much better and competitive rate of interest than an individual moneylender in your locality would. That is why it is preferable to do a thorough comparison before applying for a personal loan.
A much better option would be to compare interest rates online to see who is offering the lowest and on what terms and conditions. This can be done using a Personal Loan EMI calculator. It may happen that certain institutions are offering personal loans at lower interest rates but are getting reimbursed in some other way. So always read the terms and conditions before fixating on any one plan.
2. Collateral Assets
Whether you are salaried personnel or a self-employed individual, the lender will not ask for any security from you to approve the personal loan. However, this comes at the expense of something else.
The interest charged on a personal loan is a bit higher than secured loans. In order to get a loan at lower interest rates, try for a secured loan. There you will have to provide some assets of yours as security till the loan amount is paid off.
Due to the presence of a collateral asset, the interest charged on a secured loan is relatively lower than that in a personal loan. But as it is the case, the latter also involves nil risk of losing your asset.
3. Loan Tenure
One of the effective ways of choosing the best personal loan for yourself is by going through the tenure options. Tenure plays a very important part in any personal loan. If the loan payment period is short, the EMI amount will be more but you will escape the extra amount which goes off as interest charges.
A longer payment tenure, on the other hand, will provide you more time, lower EMI amount and financial stability but you will have to pay more amount in the form of interests. However, given the time frame allotted, most probably you will be able to pull it off.
4. Documents Required
The longer process of documentation is considered exhausting and makes things more difficult for you to get to the desired end: availing a personal loan.
Choosing a personal loan of minimal documentation in this regard will be of great help. It will save your time and energy and make availing a personal loan much more accessible. The online process of applying for a personal loan is a great way to avoid going through excessive paperwork at a bank. Although, in general, personal loans involve minimal documentation, you must choose the one which offers maximum convenience.
5. Loan Amount and Processing Fee
Go for the lender who will provide you with the loan amount you actually need. There is no point in availing a compromised amount at better interest rates if it does not totally help your case. With the approval of the personal loan, you will also have to pay a processing fee. Keeping these five points in mind, it is likely that you will make an excellent choice for getting the best personal loan for yourself.
If still in doubt, you may take the help of a loan counsellor to get a better idea about what would be best for you. Whatever the case is, first assess and then apply! Always ensure you are financially prepared for the loan amount inclusive of the interest rates, and the monthly EMIs prior to availing of a Loan.
This you can check online by entering the loan amount that you will be applying for, in the dynamic personal loan EMI calculator table, online, of that particular bank page.