| | OCTOBER 20218IN FOCUS8 Tips to Follow while Choosing the Right Personal Loan Provider BY CEO INSIGHTS TEAMThe biggest reason why personal loans are widely availed in India is because of their versatility. You can use it to finance your dreams as well as emergencies. Whether you wish to upgrade your home's aesthetics, go on that vacation you have always dreamed of, arrange a grand wedding for your son, or pay-off staggering medical bills, a personal loan can help you out. Since financial institutions do not require you to pledge any collateral or provide a specific reason for availing this kind of loan, it adds-on to the advantage. However, choosing the right personal loan provider is essential, as there are numerous players in the market, and not everyone might be perfect for your needs. Here are the tips you can keep in mind to make the task of selecting the right lender simple. Consider the Amount of Loan You NeedDifferent lenders might have different ranges in place when it comes to the loan amount. So, you need to compare and then go with the one that offers the loan amount you need. A few personal loan providers might also allow you to withdraw the amount in installments based on your needs. This way, you will have to pay interest only on that part of the loan amount which you are using. Do note that this kind of personal loan comes-in handy only when you are not very sure how much money you might actually need.Compare Rates of Interest Since the interest rate determines your EMI amount to a large extent, compare different financial institutions and zero-in on one that offers the lowest rate. However, make sure that the lender is a reputed and trusted one and you get all the services you desire. Also, if you have a good credit score or you choose a long tenure, you can negotiate the rate of interest. In case of a long tenure though, the total interest burden is greater. So, assess your repayment ability carefully and then make a choice.Find-out If Flexible Tenures are Available The best lenders in the market offer flexible tenures these days so that you can repay the personal loan as per your convenience. So, go for one that suits your exact needs. A long tenure will usually lead to a low interest rate and small EMI, and vice versa. However, as mentioned before, the longer the tenure, the higher will be the total interest cost.Check the Prepayment RulesThis is one of the most important things to consider while picking a personal loan provider. Find out what their foreclosure terms state and if you can prepay the loan without incurring any penalty. This can help you pay-off your dues before the tenure gets over and become debt-free sooner.Be Clear About the Charges InvolvedBefore you sign the dotted line with any financial institution, make sure you understand their processing fees and other charges like origination fees, administration fees and missed payment charges very well. This will help you prevent any unpleasant surprises in the future. Compare these charges across SINCE THE INTEREST RATE DETERMINES YOUR EMI AMOUNT TO A LARGE EXTENT, COMPARE DIFFERENT FINANCIAL INSTITUTIONS AND ZERO-IN ON ONE THAT OFFERS THE LOWEST RATE
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