If you don’t do a personal loan comparison, you might miss taking it at the best terms. By comparing a personal loan, you can find which lender offers you a good deal on the lump sum amount, interest rate, etc. But, how should you compare and grab the best? Comparing the personal loan interest rate is a preliminary thing to do. A lot depends on checking their effects on your finances. So, get a holistic view of how your repayment will play out in the future using some online loan tools. So, read this article for personal loan comparison and implement that in real time.
Things to Check in a Personal Loan
While borrowing a personal loan, if you take care of these below-mentioned things, you’ll be good to go!
Look to deal with the lender that offers you the maximum to meet your financial needs. Whereas a lender with a limit of say INR 3 Lakh might not suffice and go on to defeat your purpose of taking a personal loan.
It’s important to compare interest rates, which determine the amount you will pay to the lender . It is easy, you just need to shortlist the lenders whose interest rates are the lowest. Now, consider other factors and make your decision.
You have 12 to 60 months for the repayment. But do check if there is any lender who provides you a longer tenure. Because most people prefer a longer period for repayment to curtail the EMIs that fit their budget. As you know the longer the tenure, the lower will be the EMI. But with that the overall interest payment gets high.
Which Tools to Use for Personal Loan Comparison?
There are online tools available on the official website of banks and NBFCs. Using them you can find which lender’s EMI or interest payout is less. This will help you in making a decision. Let’s see how these tools work –
Personal Loan EMI Calculator
This tool generates the EMI amount when you insert details like loan amount, interest rate and tenure. With the below example, you will learn better.
Kamal is a 33-year-old MNC employee who’s been struggling to collect money for his mother’s surgery. While searching online he came across a personal loan. He thinks about it and finds himself stuck between two loan offers. Now, he needs to compare which one is the best for him.
To find the same, he should use the EMI calculator. Using this, he can know the EMI amount of both the lenders and see the EMI he can afford.
Lender A – loan amount – INR 7 Lakh, interest rate – 13.00% per annum, tenure – 12-60 months
Lender B – loan amount – INR 7 Lakh, interest rate – 15.00% per annum, tenure, 12-72 months
As you can see, Lender B offers a longer repayment time. Let’s see what their EMIs will be.
Lender A – EMI – INR 15,927-62,522
Lender B – EMI – INR 14,802-63,181
From the EMI calculator, it is clear that Lender B’s EMIs can be more affordable compared to that of Lender A.
So, Kamal opted for Lender B for his mother’s surgery.
What to do If I Already Have a Personal Loan?
In this case, you can consider a balance transfer to another lender at a lower interest rate. What will happen when you transfer your personal loan balance? When you do the same, your personal loan account will close at the existing lender and a new account will open at the new lender with the new EMI or a reduced tenure. During this process, don’t forget to collect the No Objection Certificate (NOC) from your existing lender.
Decide on balance transfer if it saves you big in terms of interest and EMI. This way, you can avoid non-payment of the loan and repay the loan fully.
So, don’t hesitate and apply for a personal loan if you need money.