There are a few important factors that you can consider while selecting a personal loan ideal for you. It includes,
The amount of EMI that you need to pay every month. This will be determined by the amount of the loan, the rate of interest and the tenor of the loan. For a given loan amount and rate of interest, the EMI will be higher for a shorter loan tenor, and it will decrease as the tenor of the loan increases.
The processing and disbursal time of the personal loan is important, particularly if the need is urgent. The lending process is generally faster in the case of account holders of the lender.
The interest rate of the personal loan is an important factor as it will decide your cost of borrowing. Different lenders charge different rates of interest. However, the fluctuations in interest rate is influenced by the interest rate of the RBI.You can compare different lenders based on the rate of interest rate they offer.
Apart from the interest rate, a loan can involve other costs like loan processing fees, stamp duty, credit assessment fees etc. Your overall cost of borrowing can increase if these incidental charges are on the higher side.
Personal loans are easily available, but be careful in selecting the right loan amount. Excessive debts can inflate the EMI and affect your repayment capacity. Calculate the amount you need, the EMI that you will need to pay regularly and your existing financial obligations while selecting the loan amount.
Understand the terms and conditions of the lender while availing of a personal loan. The policy on prepayment,acceptance of part-payment and foreclosure, redrawing of funds, services that are chargeable etc. are some of the terms and conditions typically found in personal loan documents.