Consider these 6 factors before choosing a lender for a personal loan

Personal loan: Before applying for a personal loan, applicants must consider several crucial factors. The borrower must ensure that the interest rate is affordable, there are no hidden charges, the lender is credible, and the loan is disbursed on affordable and convenient terms.

What if you get a personal loan deal from a lender, and there is another lender with a better deal on offer? To make sure that you do not lose out on the best deal, it is recommended to make note of these six points.

Planning to borrow? Make note of these six points

I. Interest rate: First, borrowers should make sure that the rate of interest is affordable and not very high. It is advisable to compare the interest rates between different lenders so that you get the best deal.

II. Hidden charges: There should be no hidden charges. This can be ascertained by checking the feedback and reviews of other borrowers.

III. Reputation of lender: Another important point to note is the reputation of the lender. If it is an unknown lender, the borrower must make sure that it is linked to an RBI-approved NBFC.

IV. Reviews from fellow borrowers: Another important aspect to note is to check the reviews of fellow borrowers. If they had a raw deal, then you should avoid taking a loan from that lender.

V. Loan duration: The tenure of the loan is equally important. A borrower must ensure that the loan tenure is optimum – neither too long nor too short. If the tenure is too long, the EMI will be proportionately smaller.

On the contrary, if the loan tenure is short, the EMI will be large. Therefore, EMI and tenure are inversely proportional to each other.

VI. Adverse impact on future borrowing: Another pertinent point worth remembering is that raising a loan raises your debt burden, thus reducing your eligibility for future loans. Therefore, this needs to be factored in before taking a personal loan.

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