Things to Consider While Choosing a Personal Loan Lender

Are you looking for ways to choose the best loan lender for your personal loan plans? Do you want to know what kind of loan lenders are the best? Then stick with this article, where we will talk about personal loans, personal loan lenders, different types of loan lenders, and who would be the best lender for you. 

What is a personal loan, and what are some of its exclusive features? 

A personal loan is a type of loan that requires you to borrow money from any lender with the promise that you will repay the money at a fixed interest rate. This loan is often taken by those who want it. You will be given a specific time frame in which to complete your instalments. Personal loan lenders often give you the benefit to repay in the form of instalments. 

Personal loans are mostly unsecured in nature and do not require you to provide any collateral or security amounts to avail of the loan. According to recent numbers, more than 78% of the total credit requests in the country fall into this category.

What are some of the exclusive benefits of applying for a personal loan? 

Here are some of the exclusive benefits of applying for a personal loan in India:

• The approval period is fast:

When you apply for a personal loan you are approved for the loan within one to two days. Your loan gets approved very quickly, and as soon as that happens, your money gets disbursed within a few hours. 

• No collateral:

When you apply for a personal loan, the lenders don’t ask you for any type of collateral or security deposit. This is a significant benefit if you do not have collateral to show the banks.

• Flexibility is high:

You have optimum flexibility in choosing the type of loan you want, the decent loan amount, and the period you require to repay your debt. 

• Zero to minimal processing fee:

There is not too much of a processing fee; rather, most banks don’t charge you anything. 

• The loan amount is high:

Your loan amount can go as high as Rs. 30 lakh, which is a huge number if seen from the perspective of a personal loan. Some banks will even be willing to lend you more than that if you have a very good credit history. 

• Low rate of interest:

The rate of interest on personal loans is quite low in comparison to other types of loans. Banks charge you a very low interest rate if you have a clean credit history, a good track record at repaying debts, and a good credit score. 

What sources are the best for getting a personal loan and why? 

Speaking of sources, there are only two from which you must choose to apply for your personal loan. They are the banks and private financiers, with the banks being the most preferable choice. 

• Banks:

Banks are the most preferred choice as a source for getting a personal loan and that is because of the rate of interest they charge on the loan amount you borrow. Banks charge you a very low rate of interest and give you a reasonable amount of time to repay your loans. You can easily repay the borrowed funds in small installments.

There are hundreds of banks in India that act as personal loan lenders, with tempting offers on your loans every now and then. Because there are so many options and you have the option to select the best one for you, it is easier to choose banks over other options available in the market.

• Private Financiers:

Private financiers could also be a preferable option for applying for a personal loan. Many private personal loan companies are there only to provide you with a loan amount. However, the problem with private companies is that they charge you a higher interest rate than banks.

This is not the only major setback you would be facing by going to private financiers. You also might not be given a decent amount of time to repay, which might cause you difficulties in repaying your loan. Sometimes, many private financiers also have hidden interests and extra charges that are not present in banks, which is why banks are preferred. 

However, some private financiers can be generous and should be relied on for a personal loan. Make sure you check the ratings of the company before taking a loan from them to ensure that everything is fine. 

What are some of the leading personal loan lenders in India in 2022? 

There are some top leading personal loan lenders in 2022, but this list is based on statistics. You should do your own research before making an informed decision about a personal loan. 

• HDFC banks:

HDFC banks have a better rate of interest as compared to other banks and personal loan lenders in the market this year. Their interest rate starts at 10.50% per annum, with a tenure of about 6 years to repay that debt. 

• ICICI banks:

ICICI banks are also a genuine option to look into for a personal loan and they charge an interest rate of 10.50% per annum. The time of repayment is also between the range of 1 and 6 years. 

• SBI banks:

SBI banks have been an age-old option for applying for a personal loan because of their trust and the connection they have built with their customers over time. Their interest rate starts at 10.60% per year for a period of about 5 years.

Wrapping it up

Most banks in India charge an interest rate in the range of 10.50% per annum to 35% per annum, depending on individual credentials and other terms and conditions. These personal loan lenders see the credit history of the individual, the credit score, and the track record with debts. 

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