Not Sure About Your Personal Loan Offer? Check For These 3 Things First

If there’s one big misconception that’s still prevalent about personal loans today, it’s that the interest rate is all that matters. Even today, many borrowers focus only on how much interest they’ll have to pay while evaluating a personal loan offer. The first step in the loan application process (whether you’re applying for a personal loan in Allahabad or Ajmer) is to find out a suitable lender that meets all your loan needs, at terms that are affordable for you. The only way you can do this is through proper and thorough research. You need to get online and evaluate as many loan providers as possible so that you can get a fair idea of what to expect based on your requirements. But while doing so, remember that there are other factors that you must consider apart from the interest rate. We’ve listed three such factors below. Read on:

1. The Repayment Tenure

This is an extremely important factor because it can either make your loan EMI repayments an easy or equally difficult affair, depending on how long the tenure is. If your loan lender offers you a longer repayment window, this is good news for you. You will end up paying lesser on your EMIs in comparison to your monthly repayments over a shorter tenure. Then again, your repayment tenure should align with your financial goals. If you want to repay your loan and get done with it faster, then opting for a shorter tenure is what you need to do.

2. Processing Fees

As mentioned earlier, the interest rate is not the only thing that decides how affordable your loan is. Personal loans also come with other payments and charges apart from the interest rate. It’s a good idea to read up on what these different charges are (so that you know what to expect) and also look them up in your actual loan offer (so that you’re aware of how much you’re being charged). The idea here is to stay informed and not be swayed only by the interest rate. Examples of such charges are loan processing charges, prepayment/part payment charges, and credit assessment charges.

3. The Eligibility Criteria

As you may know, your profession, age, work experience, and monthly income are all taken into account while evaluating your eligibility for a personal loan. In all these areas, there is a minimum requirement that you’re required to meet. Sometimes, even the company or industry you work for can have a significant impact on the interest rate that you’re offered at the end of the day. Some lenders even have different interest rate brackets that they offer customers, based on the company that they work for.

Wrap Up

As illustrated in the above points, the interest rate on your loan is not the only thing you need to check when you apply for one. Do keep an eye out for factors like the tenure, processing fees, and the eligibility criteria in place, as they are of significance as well.

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