In times of financial crisis and urgent need, personal loans can be a lifesaver. Since many banks and NBFCs now offer and actively promote various forms of Personal Loans, obtaining a Personal Loan is much simpler and quicker than it was a decade ago. However, picking the wrong Personal Loan providers and lenders can lead to frustration down the road. Those who a poor Personal Loan provider choice has previously hurt should read this post.
What is a personal loan?
Personal loans are revolving credit made out to the borrower. Unlike with a credit card, borrowers of personal loans receive their funds all at once (either electronically or in cash) and then repay the principal plus interest in equal monthly payments throughout the loan’s duration or tenure.
Moneylenders charge interest on their loans based on the level of risk they are ready to assume. This is why it’s essential to have a high credit score when applying for personal loans; a low risk means lower interest rates.
Some Personal Loan Providers
State Bank Of India
There is a wide range of interest rates for personal loans, although SBIs are among the lowest. Personal and pension loans from SBI Xpress Credit have interest rates between 8% and 10.60% per annum. You can borrow up to INR 20 lakh, and you have up to 7 years to pay it back.
HDFC Banks
HDFC personal loans are among the best because of their low-interest rates and flexible repayment terms. The annual percentage rate offered is between 10.50% and 21%. Borrowers can get loans of up to 15 million INR for a maximum of 5 years.
Axis Banks
Personal loans from Axis Bank can be applied for and approved with minimal effort and documentation. The loan terms are flexible, as is the payback plan. Interest rates given are between 12% and 21% per annum. Borrowing amounts are somewhere between INR 50,000 and INR 15 lakh. Five years is the longest possible term for the loan.
Canara Bank
Canara Bank provides individual borrowers access to personal budgets and individualized teacher loans. Teachers currently unemployed and seeking entry into the field can profit significantly from the teacher’s loan. There is a hefty annual percentage rate of interest of 12.40 percent. There is a cap of INR 3 lakh or the equivalent of 10 months’ gross salary.
Some Important Factors You Should Consider While Choosing Personal Loan Providers
Rate Of Interest
Personal loans carry the highest interest rate, typically between 11% and 28% per year, so this figure should be a primary consideration when selecting a Personal Loan Lender. In the long run, you will pay more than the original loan amount if your payback period is more than four to five years. When selecting a Personal Loan Lender, it’s essential to weigh all your options and make a well-informed choice based on the total amount you can afford to pay back.
Other Fees
Other fees are associated with borrowing money and the interest rate. The cost of submitting a loan application to a bank or other financial institution varies. The cost of your loan may be significantly increased by the processing charge, which may be a set percentage or a percentage of the total amount you borrow (often between 1% and 3%). Before deciding on a lender, it is wise to consider all the fees associated with the loan.
Processing Time
These days, personal loans can be obtained from various financial institutions, including banks and NBFCs. Personal loans, incredibly instant and pre-approved personal loans, can be obtained much more quickly than regular ones, especially for repeat clients with excellent credit. If you need money quickly, talk to your current lender or central bank about getting a Personal Loan at a competitive interest rate.
Customer Service
Although borrowing money is a once-and-done deal, there will be multiple times when you need your lender’s help. Many borrowers need to pay more attention to this criterion while making their lender selection, but it can lead to frustration if problems arise later. Therefore, carefully selecting a lender with positive testimonials from past borrowers is crucial. Make a selection based on the feedback of genuine customers by reading reviews posted online.
Conclusion
Many financial institutions, including traditional banks and non-bank financial companies (NBFCs), provide Personal Loans. To maximize your gains, however, it is essential to compare several lenders using the abovementioned criteria. In times of need, when you need money fast but have nowhere else to turn, a personal loan is your best bet.
