The coronavirus crisis has arisen a demand for emergency personal loans. Throughout these tough times, the world faced losses in business, unemployment and a huge influx in medical-related expenses. Personal loans were highly in need and are still. Repairing homes and paying for medical requirements are essential.
A personal loan is a boon as it helps you get through any tough situation. Taking a personal loan is like choosing a hospital. You need to be very careful about the charges it might mark in the form of interest rates. Getting an easy personal loan is not difficult. You just need to keep in mind these five points before you choose your lender. Five Easy Ways that Would Help You Choose the Best Personal Loan
5 Easy Ways to Choose the Best Personal Loan
- Choose Your Lender Wisely
Before starting with the key features you should be knowledgeable of. Do note that it is very important that you understand your lender and his terms and conditions. As the world is flipping over the pandemic, everything has come online. That said, you can now overwatch anything while sitting on your couch.
Utilise this ability and search for the best and easy personal loan out in the market. Compare the interest rates, tenure and other flexible terms offered by various lenders and then go for the best that suits your requirements. Do not apply for too many personal loans at a time as that is considered credit hungry behaviour. This might turn out to be an obstacle to your borrowing.
- Interest Rate
First thing first, an evaluation of the interest rate is a must before applying for a personal loan. Remember that everything depends on this value, a mere shift in the value can change the whole amount. So, remember to assess it. The Interest rate is fixed by the lender based on your credit score, income mode and creditworthiness. Remember you maintain all these factors to avail of lower interest rates.
- Maintain a Good Credit Score
As mentioned above a good credit score helps you avail of lower interest rates. Additionally, it helps you get your loan sanctioned shortly. A credit score is a value that ranges between 300- 900 and a score above 750 is considered to be good. You maintain your credit score by being responsible for your credit repayment.
- Calculate EMI
EMI or equated monthly instalments is a procedure of repaying the amount you once borrowed from a lender. It is very important to calculate the EMI so that you can manage things easily. Personal loan EMI can be calculated online. Always remember that your EMI should not exceed 40% of your disposable income. Calculate Personal loan EMI online beforehand before applying for a loan so that you could mentally prepare yourself to manage things.
- Prepayment and Foreclosure Charge
Foreclosure charges on personal loans might vary. Some lenders charge a 4% foreclosure charge on the prepaid amount. A foreclosure charge is charged when you plan to repay the loan before time. If you are planning to pay your loan early then make sure you enquire about the foreclosure charge. Enquiring about it beforehand will help you preserve unnecessary penalties in the future.
- Calculate Other Charges
Before you apply for a loan do calculate additional charges that you might be asked for. Generally, lenders fix a lower interest rate but take a huge part in the form of processing fees. The processing fee is seized while you fill up the application form and is non-refundable. Charges demanded are administrative charges, interest rates, processing fees and foreclosure charges. Do check these before applying for a loan to get a good fix.