If you are looking for a personal loan and you have a couple of offers in hand from different banks, it is vital that you opt for the one which suits you the most. For instance, when it comes to the interest rate, you are recommended to opt for the bank which charges a lower rate of interest but make sure to factor in processing charges before zeroing in on the bank.
These are some of the key factors that you should consider before you take a final call.
Personal loan: Key factors to consider
I. Interest rate: At the outset, you should compare the interest rates of different banks. And obviously, you would choose the one which is the lowest of all.
II. Bank’s reputation: Another key factor that you need to consider is the reputation of the bank. For instance, it is always better to choose the bank with which you share an old banking relationship.
III. Hidden charges: There are some hidden charges which the banks charge. So, it is vital to review those charges which the bank may levy on loan.
IV. Processing charges: The bank also deducts processing charges before disbursing the loan. Some banks levy up to 2 to 5 percent of personal loans. So, the borrower must review these charges before taking a final decision.
V. Review of loan and financial institution: Another important consideration could be a prior experience of similar loan from the same financial institution of the people you perhaps know. So, you could ask around how their experience of seeking loan from the bank.
Make sure that there are no negative reviews of the financial product on social media.
VI. Monthly instalment: Last — but certainly not the least – you should check the monthly instalment of your loan. If it is unaffordable, you should increase the loan tenure. And if it’s too small, you may decide to shorten the tenure so that the loan can be redeemed in the shortest time possible.
(Note: Raising a loan comes with its own risks. So, due caution is advised)
