How to Choose the Best Personal Loan Lender?

When you're aiming to select the best, it's crucial to compare all available options. Similarly, when looking for the best personal loan provider in India, thorough research of all personal loan lenders and a comparison of their offerings, including interest rates, tenure, processing fees, and more is essential.

How to compare personal loans and choose the best option for you:

Every personal loan lender has something unique to offer. Before apply personal loan online, make sure you compare at least three to four lenders based on the criteria mentioned below to determine who can offer you the best personal loan for your financial needs.

Interest Rate:

Personal loans currently have an average interest rate of 10.5% and above. The interest rate you are offered by different lenders can fluctuate from 10% to 30% and it depends on various factors such as loan amount, your credit score and other important factors. Borrowers with an excellent credit score of 800 and above get easily eligible for the lowest interest rate by the lender.

Approval Requirements:

Different lenders have their own eligibility criteria for approving the borrower for a personal loan application. Lenders usually look at various factors like credit score, borrower’s monthly income, etc. to determine their creditworthiness and eligibility for availing a personal loan in India. Knowing about the approval process and requirements is necessary before applying for a personal loan, it will help you to choose the right lender for your personal loan.

Fees:

There are many fees associated with personal loan such as application fees, prepayment penalties or origination fees, these are hidden fees which you must make sure to take a look at, as this can increase the overall cost of your personal loan even with a competitive interest rate. There are few lenders who charge some percentage of the loan amount as origination fees for the borrowers with bad credit score and it varies depending on the lender. 

Make sure to learn about all the fees related to personal loan because there are many hidden charges and later on you will come to know about it, as these fees will be deducted from your funds which can be surprising for the borrower.

Co-signers:

If the borrower has a bad credit history will tend to pay a higher interest rate on the loan. In such a case, Lenders also allow you to apply for personal loan using a co-borrower or co-signer, as this could help you improve your approval odds and also the interest rate on loan. The research is important as not all the lenders offer this option. But keep in mind to choose your co-signer wisely as this will directly affect your loan eligibility.

Repayment Options:

The longer the tenure the higher the interest rate and more the lender will earn. A two or three year term has high monthly payments but this will save a lot of money as you need to pay less interest rates. So choose the lender who provides a better repayment option with less interest rate.

Loan Amount:

Lenders often offer personal loan amounts from Rs.15,000 to RS 90,00000, although some lenders have personal loans up to Rs. 6 crore. For many borrowers, this may cover almost any big expense. Borrowers with high income and excellent credit score get the larger loan amount. Check different lenders cutoff before you apply for personal loan since some may limit borrowers to just RS. 5,00,000.

Unique Features:

Many lenders offer additional perks to enhance the loan deal for customers. For instance, some lenders may offer free credit score monitoring, credit reports or may be the online privacy protection services too. So also look for these unique features offered by lenders.

Customer Services and Experience:

Some lenders only have email type forms to submit questions, while others lenders provide phone and chat options. If you are looking for a personal loan from any NBFCs or Bank, you may also be able to get in-person attention. Look for the lenders who are easily available to assist you with the information and queries you have regarding the loan process, so that you can get proper guidance.

Why it is important to look around for lenders?

Ultimately, the best personal loan comes down to the lender’s reputation and the loan terms it’s offering. So for fast approval personal loan and availing the best loan option among all is necessary to save your time and money both. By doing so you can avail the best personal loan in India. After going through the complete blog now you must have got the idea that; how you can choose the best lender for personal loan by keeping in mind a few factors including loan amount, tenure, fees and many more.

Also read: 6 Common Reasons for the Rejection of a Personal Loan