Personal loans are the most flexible ones of all. There are no limitations from lenders of how you can spend the money borrowed. The borrowed money can be used for business expenses, medical bills, house repairs, even repaying credit card debt just anything.
The cherry on the top is that you don't have to give any fixed deposits or properties for a mortgage. Hence they can be a great way to manage any emergency expenses occurring.
Although personal loan interest rates can be a lot higher than other loans. It's repayment periods are also less than others. It's necessary to compare different lenders to make sure you are getting the best deal possible.
The key factors to keep in mind while taking a personal loan are following
Lower interest rates
Interest calculation
Low processing fees
Low partial prepayment
Simple documentation
Quick disburse
Flexible repayment period
The interest calculation method used by the lender is also very important. See to it that they use the standard EMI calculator.
Personal loans come with an origination fee it tends to be 1-6% of your loan amount. An origination fee on the lower side can be of great help to the borrower.
The interest rates of some banks are provided -
ICICI Bank - 10.75%
SBI - 9.60%
HDFC - 10.50%
Axis - 10.49%
Tata capital - 11.90%
Kotak - 10.50%
Yes bank - 10.45%
IDBI - 12.50%
Syndicate Bank - 13.40%
PNB - 8.95%
Canada Bank - 13.00%
Processing fees of some banks are given below-
SBI - 1.00%
BOB - 2%
HDFC - 2.50%
ICICI personal loan - 2.25%
HDFC - 0.99%
PNB - 1.8%
Yes, bank - Rs. 9999
Axis bank - 1.75%
Documentation for some banks can be very time consuming as they require a lot of documents some of which may not be available to everyone. It also increases human to human contact in the pandemic.
A lot of digital banks try to reduce such documentation which is done online and it tends to be very quick.
As personal loans are generally taken in a case of emergency, a lot of borrowers don't have enough time to go through all the protocols of conventional banks.
The disbursement of the money also needs to be quick as one does not want to wait for months to receive the amount allowed.
The repayment period for personal loans depends on your credit score. Although one does not want a very low repayment period as the amount and it's interest taken can be a lot to procure in such a small duration.
Keep in mind that personal loans heavily depend on your credit score hence find a bank which will give best possible outcomes for your credit score personally.
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