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    How to Choose Right Personal Loan – Follow These Steps to Make Wise Financial Decision

    People take personal loan to meet various expenses that arrive all of a sudden in life. They take personal loan for the following reasons –

    • Meding emergency
    • Wedding or other important functions
    • To pay the credit card bills
    • For financing family vacations

    How to Find Right Personal Loan Lender

    Finding a personal loan lender is just the tip of the problem. The main problem is finding the right personal loan lender which lends personal loan at a low-interest rate. To avail low-interest rate on personal loan, people go through a vicious cycle by visiting one bank to another. And in dire straits, they go for loans that can potentially put them in a debt trap. To make you choose better, we have come up with 5 super-easy steps on how to choose the right personal loan. Continue reading this post and make a wise financial decision.

    1. Analyze the rate of interest of various lenders – There are many banks and NBFCs, and due to that ty.jgfsyour chances of getting your loan application approved is higher than it was ever before. But the catch of getting personal loan approved instantly is they charge high-interest rate. To avoid that, you must analyze the interest rate of various lenders before opting for anyone specific. This information can be easily accessed by you as almost every lender is now on the digital space. All you have to do is to visit the site and check the interest rate. Subsequently, you can also get in touch with representatives of lenders through customer support number to get information on personal loan interest rates. Below, we have mentioned a comparison table of various lenders with their rate of interest on personal loan. 

    Bank

    Interest rate

    Kotak Mahindra Bank

    10.99% onwards

    HDFC Bank

    11.25% onwards

    State Bank of India

    12.50% onwards

    Standard Chartered Bank

    10.89% onwards

    Yes Bank

    10.75% onwards

    ICICI Bank

    11.25% onwards

    1. Segregate lenders on the basis of processing fees – Interest Rate is not the only thing you should look for when you are seeking a personal loan. Many lenders offer personal loan at “just 14%” rate of interest but the processing fee for the same goes up to 6% of the total loan amount. It’s kind of a trap as you will think that you’re getting a cost-friendly personal loan but you’re not. Check out the processing fee of the lenders we have mentioned above.

    Bank

    Processing Fee

    Kotak Mahindra Bank

    Up to 2.5% of the total loan amount

    HDFC Bank

    0.99% – 2.50% of the total loan amount

    State Bank of India

    1% of the total loan amount

    Standard Chartered Bank

    Up to 3% of the total loan amount

    Yes Bank

    0.99% – 2.50% of the total loan amount

    ICICI Bank

    0.75% – 2.25% of the total loan amount

    1. More flexibility in repayment options means the better personal loan – Always go with financial institution which provides flexibility in repayment options. At some point of loan tenure, we always feel like finishing the sanctioned loan amount before the loan tenure ends. For that, we have to pay some foreclosure fees. Most of the banks charge around 2% to 5% of foreclosure charge to the loan borrower in order to finish the loan repayment process. Choose a financial institution with least foreclosure charges. 

    Bank

    Foreclosure Fee

    Kotak Mahindra Bank

    5%

    HDFC Bank

    Up to 4%

    State Bank of India

    3%

    Standard Chartered Bank

    2% – 5%

    Yes Bank

    4%

    ICICI Bank

    5%

    1. Finding the best EMI option – Once you’re done with checking the interest rate and other fees on personal loan, look for Equated Monthly Installment (EMI) options that you can avail at the time of loan application. Don’t choose the high EMI loan if you’re unsure about your income flow. As lenders charge more money on the late payment of EMI, you probably won’t like to pay additional money on interest rate. Analyse your expenditures, know what you can pay, and then only reach to the point of EMI commitment. To know more about EMI and how much EMI you should opt for, check out the various online EMI calculators like Afinoz personal loan EMI calculator.
    2. Compare your other options – A personal loan is one of the best financial assistance at the time of need of funds. But it’s not the only one. Sometimes, our needs are not that greater as we make it to be. For such times, we can borrow money from friends and families. We can also look for a personal loan from alternate options like instant personal loan from mobile apps. These type of personal loan can be easily availed. If your needs are smaller, choose instant personal loan from mobile apps. The approval rate of personal loan with these apps are way superior than most of the banks and NBFCs.

    By following the 5 steps mentioned in this post, you can easily pick the right personal loan lenders. 

    Apart from these steps, you can also check out the penal charge on late payment of EMI, lenders credibility, and eligibility criteria of various lenders to choose the best personal loan for you.

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