The advent of Personal Loans has brought about a complete change in the way people manage their finances. No longer do they have to approach private moneylenders and seek hefty credit at exorbitant interest rates. Neither are they required to pledge their assets nor do they go through a complex documentation process.
Instead, they can now opt for a collateral-free and pocket-friendly version of Personal Loans which carry the power of fulfilling both, long-term and short-term life-stage based objectives. In addition, with advent of digital lending platforms, tailor made Personal Loans are now available.
Nevertheless, before applying for a Personal Loan, most people prefer to conduct thorough research online. For this purpose, they visit different websites wherein detailed loan comparisons are provided/have been made. These platforms, however, compare Personal Loans solely based on how modest their interest rates are and how low the EMI offerings are. As a result, they may not provide a comprehensive analysis, as it doesn’t include crucial variables which harbor the potential to affect the quality, affordability and value of their loan.
As a borrower, if you too have been struggling in the choppy waters of loan comparison, here are the factors that you should consider while comparing various varieties of Personal Loans –
- Terms & Conditions :Every lending institution prescribes a certain set of terms and conditions which govern the disbursal of Personal Loans. These terms and conditions carry information about various aspects of a Personal Loan in grave detail. Be it loan features, eligibility criteria, total tenure, repayment schedule or prepayment charges – the T&C section contains all significant particulars about different loan attributes.Therefore, when you are comparing Personal Loans across several websites, make sure that you extensively read through the specific terms and conditions of their allotment.
At LoanTap, for example, the terms and conditions under which each loan category operates are shared when you check your eligibility criteria by clicking onto Check My Rate. Applicants get to know processing fees, charges and other terms and conditions upfront.
- Total Tenure :The total period for which you intend to avail a personal loan can have a direct impact on your EMI. For instance, if you have applied for a loan worth Rs. 1 lakh (for example at an interest of 18% annual interest rate and a tenure of 24 months) your EMI would turn out to be approximately Rs. 4992 per month. However, if you increase your tenure from 24 to 48 months, your monthly EMI would come down to Rs. 2937. A longer tenure, thereby, can give you the benefit of low EMI, while increasing your total interest rate cost.In such a case, one needs to check whether the lending institution has a lock in period for prepayment of loan or not? At LoanTap, there are no prepayment charges after 6 months of servicing the loan. So, does not matter whether you are taking loan for 24 months or 48 months, the interest outgo is reduced as soon as you decide to close the loan through prepayment.
Another option in case you do not want to pay high EMI, you can simply avail an EMI free loan from LoanTap. Under this category, you only have to pay the interest every month, whereas the principal amount can be repaid after every 6 months! With EMI Free Loans, your monthly loan repayment gets reduced by as much as 40%. Every time you make a bullet payment towards principal amount, outstanding amount reduces and the interest is recalculated on the outstanding amount thus, reducing the interest outgo from the next month.
- Application Process:The best loans are usually those that do not require a long-drawn and complicated application process. They are largely sanctioned with simplicity, efficiency and ease. This will help you resolve any issue in future, quickly. The moment you are asked to fill numerous forms and provide a great amount of documentation, the entire loan operation tends to lose its edge as most of these loans are applied in emergency.Therefore, don’t forget to find out details about the application process of different lenders before applying for a quick loan. Many digital lenders now help process loan faster owning to their algorithm.
Consider digital platforms like LoanTap for this purpose. If you want to obtain a personal loan from here, all you have to do is check your eligibility, if you are okay with our provision amount, fill in your specifics, upload your KYC documents and within 24-36 hours your loan will be sanctioned.
- Product Variety:Irrespective of their interest rates, Personal Loans do not always have to be used for a predefined purpose. You can utilize them for meeting any objective that you may deem fit. For example, home renovation, car purchase, international travel, wedding expenses or educational sponsorship. A personal loan can ideally fulfill all your legitimate needs and requirements.This is precisely the reason why you ought to compare the loan products offered by different lenders before applying for a loan. Make sure that the product variety available is not generic. Instead, find out if it has been specifically crafted to meet carrying consumer demands. At LoanTap, for example, a massive variety of fit to pocket and quick loans are provided to customers. They include Advance Salary Loans, Credit Card Takeovers, Wedding Loans, Rental Deposit Loans, Holiday Loans and EMI Free Loans.
- Hidden Charges Last but not least, you must compare various Personal Loans in terms of the total charges that they propose. While some charges might be clearly mentioned in the loan documents, there might also be some hidden charges that you need to make yourself aware of. These include handling fees, prepayment charges, late payment penalties, administration fees, processing fees, legal charges and recovery charges. Collectively, these hidden charges can constitute an amount that ranges from 1%-3% of the total credit sum being availed. Therefore, it is extremely important to go through all the Personal Loan provisions in order to arrive at a decision regarding which particular loan can prove to be the best bet for you.With changing times, the methodologies of comparing Personal Loans are also undergoing a massive transformation. Earlier people considered only interest rate as an important parameter. However, now, the concept has evolved. Lending is a relationship between lender and the borrower. It must be transparent and reliable.
Now, you can simply log on to a lender’s website, find out each detail about your prospective Personal Loan. You can also check reviews on social media, their own sites to understand how the customer experience has been.
Making comparisons considering the aforementioned parameters is actually the best way to avail a Personal Loan. So, get prepared to give wings to your dreams and find a Personal Loan lender who offers the benefit of both tailor-made and personalized loans, within the span of a few hours!