How to borrow right Personal Loan from Banks

A personal loan is the most popular loan offering in the retail loan market due to the various advantages it poses. It is generally an unsecured, collateral-free loan, with quick approvals and speedy disbursals. One of the major advantages of a personal loan is that the loan amount could be used for any legitimate purpose - the end use is not restricted, making it one of the most flexible loans in the market.

Everyone could do with a little credit, in the form of a personal loan, at some point or other in life. A personal loan can come to your rescue during times of financial crisis. Be it for home improvement, to pay for your dream vacation, to buy your significant other that much-coveted gadget, to cover a temporary loss in income or to cover medical costs, a personal loan comes in handy for all kinds of needs. You can fulfill all your financial obligations in a hassle-free manner with the help of a personal loan.

Due to the advantages that this loan product has, the market is flooded with a variety of offers. At times, it can get overwhelming to choose from the wide variety of options available.

The only way to decide which personal loan offer is right for you is to thoroughly research the various loan offers available in the market. Some lender websites will allow you to do a quick online eligibility check to see what kind of loan you qualify for so that you can make your decision accordingly. It is important to be informed of the products and compare the features and benefits to determine which offer best fits your credit requirements. It is important to choose the loan offer that is suitable to your needs and budget.

Above all, do not rush the decision. Auto loans mean a commitment of several years and it is important to find both the vehicle and the loan offer that is most suitable for your needs.

Here is what you need to know about choosing the right personal loan from banks.

Check the processing fees: Typically, lenders charge 0.50% to 2% of the loan amount as processing fees – this amount is deducted from the loan amount at the time of disbursal. You should know this information beforehand and compare with different lenders.

Check the loan processing time: Check with the bank for the time taken to process a loan, and the documentation required. Lesser the document required, lesser the time it will take to process the loan.

Prepayment charges: This is an important factor and will affect how much you pay as the penalty, should you decide to prepay the loan before the tenure is up. Typically, lenders charge around 2% to 4% of the outstanding amount as the prepayment penalty.

Credit history: Lenders make a loan sanctioning decision based on your credit history and your repayment behavior. If you have no credit history, then lenders will most probably reject your loan application, since they have no data points with which they can verify your credit worthiness. In that case, it is best to approach your existing lender, where you have a savings/salary account.

Approach your existing lender first: Ideally, approach your existing lender – this will make the documentation process easier. Also, you will get access to a variety of offers and discounts, along with a special reduced rate for loyal customers.

Apply for personal loan in India

You can check your eligibility and apply for a personal loan by signing up with CreditMantri. It is quick, simple and above all, free.

CreditMantri matches your credit and demographic profile to the lender's lending criteria and presents you a shortlist of only those lenders willing to lend to you based on your unique credit profile. In effect, we pre-screen your application to make sure you are likely to qualify as per the lender's credit criteria. Hence, the chances of your personal loan application getting approved are higher.

Click here to sign up and apply for loans and credit cards, the CreditMantri way!