Financial distress can occur with any person and at any given point in life. This distress can be caused due to a sudden social function or debt consolidation. Therefore, at such times, rather than seeking capital assistance from friends and family, the best thing would be to opt for a personal loan. A personal loan is not only unsecured in nature; further, you can use the loan amount in whichever way you want- as long as it is legal. You can purchase a new device or even fund your last-minute unplanned trip. In recent times, a lot of new-age financial institutions have started offering personal loans at way lower interest rates than the ones provided by the traditional financiers. However, you can further make the borrowing process better by personal loan comparison.
The various factors to consider when comparing personal loans are here as follows:
· Credit score and history: Although, most of us might already know about this factor; however, there are still a few who ignore it. Your credit score and history are the first things that you need to check before opting for a personal loan. The reason being; the financial institutions determine your loan worthiness and repayment capability on the basis of your credit score and history. You can easily check your credit score from CIBIL and ensure that it is more 750; for that, you need to repay all of your previous and current debt on time. Hence, your credit score and history are the first things that you must check for personal loan comparison.
· Eligibility criteria of the financial institution: This is yet another factor that you should consider before opting for personal loans. The reason being, eligibility criteria of the financial institutions’ vary from one lender to another. Therefore, you might be eligible to avail personal loan from a particular bank or NBFC (non-banking financial company); however, at the same time, your application might be rejected by the other. Hence, ensure that you check the eligibility criteria for personal loan comparison.
· Personal loan interest rates: The banks and NBFCs (non-banking financial companies) charge you with interest rates for the financial assistance that they provide. However, similar to the eligibility criteria, even the interest rates vary from one lender to another. But you can calculate them by making use of an interest rates calculator or on the aggregator site. This will help you to find the best form of a personal loan at the lowest interest rate possible.
· Processing fees and other charges: You should also consider these charges that get added-up in your repayments. These charges are the processing fees that you need to pay in order to get the loan amount disbursed, your late-repayment fees, check bounce charges, etc.
· Customer service: Check the number of offline branches that the particular financial institution has. Other than that, you should also read reviews of the social media websites in order to get an insight into the quality of customer service provided by the bank or NBFC (non-banking financial company); this will help you with personal loan comparison.