Should you look for better alternative when you have instant loan offer in hand? All scenarios explained

Personal loans: Getting a loan offer from a bank or fintech platform is not an uphill task. If the loan applicant enjoys a good credit score, they can secure a good personal loan in no time. All the person needs to do is share their mobile number, get the eKYC done, and submit the necessary documents with the application.

Based on the credit profile, the lender makes an offer, which the customer needs to accept later. But is it wise to look for a personal loan offer from another lender despite having an offer in hand? You can take this decision based on these factors.

Should you look for an alternative lender?

A. Time period: Typically, a bank’s loan offer is valid only for a short while, and one must claim it before it expires. So, there is not much time to consider whether to take it or not. This must be kept in mind before deciding whether to explore another alternative.

B. Rate of interest: One of the primary reasons to look for an alternative lender is the search for a lower rate of interest. Usually, you can seek a lower rate of interest if your credit score is exceptionally high.

C. Processing fee: Another significant factor in choosing a lender is the processing fee. If it is too high, your loan proceeds will fall accordingly. In view of this, you may want to look for a better loan deal from another lender.

D. Hidden cost: There could also be some hidden cost involved in the loan deal, which is revealed later. Suppose you had a friend who took a loan from the same lender and told you about this hidden cost. In such a situation, you may be keen on considering a different lender.

F. Recommendation: Last but not least, there could be some positive feedback on another lender from someone you know. That could be an incentive to explore the option of choosing an alternative lender.

Disclaimer: Mint has a tie-up with fintechs for providing credit, you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. Mint does not promote or encourage taking credit as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.

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