5 Tips to Help you Choose the Best Personal Loan in India

Applying for a personal loan online is not a very difficult process anymore. There are multiple lenders to choose from and a lot many financial institutions are willing to help applicants avail a loan from the comfort of their homes. 

However, if you want to explore and understand which is the best personal loan in India that can also suit your needs, multiple things need to be taken into account. This article highlights the 5 most important tips when opting for a personal loan.

5 Things to Note When Choosing the Best Personal Loan in India

1. Loan Interest Rates

An important step when deciding which bank/lender to opt for is by comparing the interest rates that lenders/banks expect on the loan amount. 

Most banks publish the rack interest rate range on their respective websites, however, they may offer a preferential rate based on your creditworthiness and factors such as monthly income and employer’s profile.

It is best to approach the preferred lenders to get a fair sense of the interest rate you will be charged according to your credit profile.

2. Charges and Fees

In addition to interest rates, different financial institutions have varying fee structures that are applicable on a personal loan. The list of charges usually includes processing fees, late payment charges, loan cancellation fees, cheque bounce charges, and service tax for each service provided by the bank. 

All of the above-mentioned fees vary from one lender to another. You should therefore calculate the overall charges while deciding which personal loan works best for you in terms of the charges levied.   

3. Flexibility

Financial institutions also offer a flexible personal loan option which ensures instant availability of funds and hence is ideal in cases of emergencies. The credit limit here is pre-approved and it can be availed with minimum documentation.

Additionally, an applicant can even choose to repay the loan amount before the tenure ends without any foreclosure charges. If you want to arrange finances within minutes and with few terms and conditions, remember to check the flexibility options on the personal loan.

4. EMI 

A personal loan evidently needs to be repaid through monthly instalments and hence it is essential that you are sure about paying the EMI amount in addition to your other financial obligations. As a thumb rule, your monthly instalment should be less than 40 per cent of your total income.

EMI can be managed by understanding the tenure options that the lenders offer. But, it is important to remember that while a loan with longer tenure results in less EMI the interest rates will increase as a result.

5. Documentation

The ideal or best personal loan is the one that is easiest to avail. Most people apply for a loan when there is an urgency and tedious documentation can only slow the process.

Most banks/NBFCs allow online applications for a personal loan, but some might demand too many details and have lengthy verification processes while some others will offer instant approval where the money will reach your account within minutes. 

Why Should You Apply for a Personal Loan with Paytm?

The process of applying for a Personal Loan with Paytm is completely digital, transparent and paperless for the customer. There are no sale calls or multiple documents needed to enable or initiate the process. Here’s a look at its key benefits:

1. Digital: It is 100% digital and paperless for the customers without any sale calls to enable or initiate the process.

2. Flexible: Users can choose an amount from ₹10,000 to ₹3 Lakh and convert it into EMI.

3. Available 24x7: The loan can be easily applied anytime, anywhere and even from a mobile phone.

4. Quick: With the necessary documents in place, the application process can be completed within 2 minutes. 

Personal loan with Paytm is also eligible for foreclosure which means you can pay the complete amount before the end of the loan tenure and without any extra charges. Additionally, timely repayments can improve credit score and make users eligible for higher loan amounts.

Disclaimer: Loans offered on Paytm are subject to terms and conditions/policy parameters/internal checks as specified by the lender.