An FDIC-insured bank: It’s a source of a lot of different financing, from personal loans to home equity loans. First stop should be any place you already have an account or loan; existing customers often qualify for special “relationship” rates or deals.
A credit union: Again, extra points if you already bank there.
Online lenders/banks: Digital institutions pass on the amount they save in overhead to you in the form of lower interest rates. They often have streamlined approval processes, too. Just be sure to do due diligence about the lender.
If you can’t go to a relative or a friend to borrow money, the best places to borrow money include:
An FDIC-insured bank: It’s a source of a lot of different financing, from personal loans to home equity loans. First stop should be any place you already have an account or loan; existing customers often qualify for special “relationship” rates or deals.
A credit union: Again, extra points if you already bank there.
Online lenders/banks: Digital institutions pass on the amount they save in overhead to you in the form of lower interest rates. They often have streamlined approval processes, too. Just be sure to do due diligence about the lender.
To ensure that an Instant Personal Loan is viable, you must ensure that you pick the right lender. Take a look at 5 pointers that you can use to evaluate lenders better.
Compare personal loan rates:
Before starting the application process, you should always shop for the ideal personal loan. Lenders include traditional banks and NBFCs, all of whom charge different interest rates. Keep in mind that with every personal loan application, your CIBIL score takes a small hit. So, your loan application should be the final step. First, compare loans, contact lenders and seek all the necessary information.
Check the loan amount :
The amount of total money required is unknown initially and is majorly dependent on the users’ needs. Choose a lender who offers a substantial loan amount that is sure to cover your expenses. You can also pick a lender who offers you more flexibility. Some lenders offer a Flexi Personal Loan where you can withdraw the loan amount in parts, as and when you need funds. You only have to pay interest on the amount that you use and you can choose to pay EMI comprising only the interest. You can then repay the principal at the end of the tenor. This type of a loan is ideal for a home renovation, for example, wherein you have to make regular payments of varying sums to different service providers, and can’t be sure of how much money you actually need.
Read the fine print :
Each loan provider will have a legal document dictating the terms of your personal loan. So, you must ensure that you read through the fine print and understand your obligation. Make sure that you are aware of and agree to all the conditions spelled out regarding the personal loan. If you have any doubts, contact the lender for clarity. This document is legally binding, so make sure you are comfortable with the terms it contains.
Take note of processing charges :
Lenders charge a processing fee of 2%-3%, exclusive of GST. This amount is deducted in from the loan amount that you are to receive. Find out what the lender is charging you to process your loan and then ascertain its affordability before applying for it. Check all the other associated charges too.
Check for prepayment charges and penalties :
It is prudent to use any surplus income to make part prepayments towards your loan. This will help you pay lower interest. However, some lenders have stringent rules regarding prepayment accompanied by hefty charges. So, find out what these are and the minimum prepayment amount allowed. This will help you realize if you will be able to clear the loan quickly or not.
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