4 Important Things to Consider for Comparing Personal Loans

When it comes to borrowing money, personal loans are often a popular option due to their flexibility and ease of application. Personal loans offer the ease of applying for various options like that for higher education, weddings, medical expenses, vacations, etc. Along with the purpose of the loan, you must take into account elements like your credit score, interest rate, and other fees when applying for a personal loan. You can choose what works best for you by considering these parameters.

Different lending institutions like SMFG India Credit give out personal loans at different criteria. The following article talks about personal loan comparison to help you analyze the various agencies in the market better to make the best financial decision.

4 Factors of Personal Loan Comparison

Before you apply for a personal loan, here are four important things to consider when comparing options:

1. Personal Loan Interest Rates

The interest rate on a personal loan is one of the most important factors to consider. It determines how much you will pay in total over the life of the loan. It's crucial to compare the annual percentage rate (APR) rather than just the interest rate, as the APR includes any fees in addition to the interest. Personal loan interest rates can vary significantly from lender to lender, so it's vital to shop around to find the best rate. Keep in mind that your credit score can also affect the interest rate you are offered, so it's a good idea to check your credit score before applying for a loan.

The best loan provisions come at personal loan interest rates starting from only 13%*.

2. Loan Tenure

The loan tenure refers to the length of time you have to pay back the loan. Personal loan tenures can range from a few months to several years. A longer loan term may have a lower monthly payment, but it will also result in paying more in total interest over the life of the loan. It's important to consider your financial situation and determine how much you can afford to pay each month before deciding on a loan term.

For the most convenient repayment plan, you must consider flexible loan tenures ranging up to 60 months even.

Must Read: Credit Card Loan vs. Personal Loan - Which One is Better?

3. Additional Fees

There may be fees attached to personal loans, such as origination fees, late payment fees, and prepayment fees. Lenders charge origination fees to cover the expense of processing the loan. If you fail to make a payment or pay after the due date, late charges will apply. If you pay off the loan early, prepayment fees apply. To be sure you are getting the best deal, it is crucial to examine the costs levied by various lenders. It is wise to inquire about any prospective fee exemptions because certain lenders may waive particular fees for specific clients.

Moreover, ensure that you look into the lending institution for no hidden charges and fees.

4. Credit Score Requirement

Always consider that lenders may have different credit score requirements during personal loan comparison. If you have a lower credit score, you may not be approved for a loan or may be offered a higher interest rate. It's important to compare the credit score requirements of different lenders to find the one that is most likely to approve your loan. Based on your history of repaying credit, your creditworthiness is represented by your CIBIL score. A score above 750 on the CIBIL scale, which runs from a scale of 300 to 900, is desirable. Poor debt management is indicated by a lower credit score, which could lead to your loan application being declined or your interest rate is increased. Keep in mind that applying for multiple loans in a short period can negatively impact your credit score, so it's a good idea to do your research and compare offers before applying.

In addition to these four factors, it's also worth considering the reputation and customer service of the lender, as well as any additional perks or benefits they may offer. For example, some lenders like SMFG India Credit may offer a lower interest rate for customers along with a hassle-free application process. It's important to do your research and shop around to find the personal loan that best meets your needs.

Conclusion

A trusted financial institution like SMFG India Credit can be your best bet to apply for a personal loan that is best suited for your purpose. Detailed information about the purpose, interest rate, and term of the loan is provided to get an accurate idea. Along with it, tools like our online personal loan EMI calculator can be useful when you have to decide the amount of the loan.