Getting a personal loan can be simple or tough, depending on one’s current financial status. If one has been a good debtor throughout, always making timely payments and never letting loans pile up, then that is bound to show up on one’s credit history, resulting in a higher CIBIL score, and allowing the person to apply for a loan anytime.
He might also find that creditors are rather eager to loan out the money to him. However, how does he ensure that the loan that he had applied for was the very best that he could have applied for?
Before zeroing in on the particular bank or financial institution, it is important to check out a few things to ensure that you have taken the best personal loan possible and at the same time work towards increasing your personal loan eligibility.
Here are some points to keep in mind while looking for the best options:
* The best personal loans will obviously have the least interest rates. For example, some banks tend to deny personal loans taken for events like luxury holidays or foreign trips and only lend out unsecured personal loans for events such as the wedding or repairing a house.
Depending on the circumstances, the interest rates are also higher but that should not be the case. Look around till you have seen and compared the rates across quite a few institutes.
* The best financial institutions do not have any hidden charges pertaining to organization fees or processing fees. NBFCs like Bajaj Finserv always have competitive rates and clients do not have to worry about additional expenses later on.
They also make it a point to verify all documents and meticulously go through your credit history, with the experts also advising you about the best course of action that would improve your credit score on the long run.
Bajaj Finserv has personal loan options for up to 25 lakhs and one can get their loans approved online instantly if all the other documents are in place. They also have the best personal loan interest rate.
* While most debtors are worried about the two major aspects of loan tenure and loan interest, there are certain other nuances that have to be looked into. For example, while one usually worries about whether the loan would be repaid on time or not, the reverse might also happen.
A sudden increase in pay package at the workplace might enable a debtor to get rid of his loans for good and he might be looking forward to a pre-payment. But what if there are prepayment penalties, and if there are, then how much is it?
Is it worth paying that extra money or would letting the loan repayment take its regular course of action be the best idea?
* Some banks insist of automatic withdrawals from the account during repayment and that might result in an overdraft. So it is advisable to set a minimum bank balance alert system. One should also look for flexible payment features because flexibility in due date, direct payment to creditors and late fee consideration are user- friendly options, which would come in handy especially for those who are applying for a personal loan the first time.
* It is also necessary to talk to one’s CA about the long-term repercussions of this move before you apply for a personal loan. While such loans are also approved for larger amounts, in some cases, till about 40 lakhs, the tenure of repaying them is also as long as 20 years.
This is not a financial responsibility to be taken lightly. Are the existing loan features acceptable to you enough that you can embark on such a long journey? If not, it might be a good idea to look some more or save enough yourself to bring down the personal loan amount.
The major documents required for Personal Loan are IT returns and audits of the last three consecutive years, documents pertaining to identification, credit history, CIBIL score, and bank passbooks and monthly pay slips of salary. When all these aspects satisfy the creditor, one can get the loan one requires.