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Finding the right personal loan involves a lot of research and time. Most people try to get a personal loan that has the least amount of requirements. This just makes things simpler.
It is also a good idea to improve your creditworthiness before applying.
Personal loans are unsecured and collateral-free, which suits many people when they are looking for extra funds.
Debt is like any other trap, easy enough to get into, but hard enough to get out of.
To select the best loan for your needs, first assess the following factors:
Interest Rates
First off, compare the interest rates offered by several banks.
Some banks might claim to be offering you attractive personal loan interest rates, but do not get carried away by their marketing schemes.
Thoroughly research banks by visiting their websites and interest rate comparison sites. The lower the interest rate, the better it is for you.
Some people are just stuck in their ways and have been brainwashed into believing that credit cards and debt are an unavoidable part of life.
Fees and Charges
It’s a good idea to look beyond eligibility criteria and interest rates before deciding on a loan.
Another important factor to consider is the additional charges involved. These additional charges can include processing and penalty fees among others.
Processing fees can vary between 1% to 3%. The fees can lead to a considerable increase in the cost you need to pay so stay vigilant.
“I don’t want to spend the rest of my life paying off loans when I don’t even like school to begin with.”
―
Repayment Flexibility
After checking your personal loan eligibility and interest rate, you need to consider the factors which will affect you when you repay it.
Most personal loans come with prepayment and foreclosure charges.
The prepayment charge is the small fee you need to pay if you wish to repay the amount before the loan tenure ends. Most banks charge a foreclosure fee, which amounts to 2% to 5% of the balance amount.
You must choose the personal loan, which allows you to repay the loan quickly without causing financial strain on your daily expenses.
“What can be added to the happiness of a man who is in health, out of debt, and has a clear conscience?”
-Adam Smith
EMI
Do you live in India?
The equated monthly installment (EMI) you need to pay is the most important factor you need to consider when choosing a personal loan.
It would be best if your EMI doesn’t exceed 50% of your monthly income. You can use an online EMI calculator to get an approximate idea of your EMI amount.
“This would be a much better world if more married couples were as deeply in love as they are in debt.”
-Earl Wilson
“One can pay back the loan of gold, but one lies forever in debt to those who are kind.”
-Malcolm Forbes
Assessing all these factors thoroughly will help you find the right personal loan for YOU. Good luck!
Finding the right personal loan involves a lot of research and time. Assess the following factors before choosing a personal loan! Click To TweetWhat has helped you obtain a loan?
Krystle Cook – the creator of Home Jobs by MOM – put her psychology degree on a shelf and dived into a pile of diapers and dishes instead. She is a wife and mother to two rambunctious boys, sweating it out in her Texas hometown. She loves cooking, DIY home projects, and family fun activities.
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