Factors to consider while comparing the personal loan

Factors to consider while comparing the personal loan

A personal loan is an unsecured type of loan that is easy to get and is used for personal finance needs like medical expenses, home renovation expenses, travel expenses, luxury items expenses, clearing off the debt, paying credit card bills, covering medical expenses, covering wedding expenses, covering educational expenses, buying gadgets, etc.

There are many lenders who have different charges applicable to a personal loan. There are different interest rates, processing fee, documentation fee, prepayment fee, etc by various lenders. So, even if one is offering loans having low-interest rates, that doesn’t mean the entire loan cost will be low because there might be other charges that could be high.

So, before selecting a lender, it is necessary to compare different lender’s personal loan schemes. Here are the factors to consider while comparing personal loans.

The amount offered by a lender

One can get a personal loan from banks or NBFCs. Here is our quick comparison between bank and NBFCs. There are various banks that offer different loan amount. Don’t just pick your lender randomly, do good research and then only select the most suitable lender that will offer you an affordable loan. Here is a list of some banks with their offered loan amounts.

BanksLoan amount offered
SBIUp to 15 lakhs
Bajaj Finserv Up to 25 lakhs
Standard Chartered BankUp to 30 lakhs
Axis BankUp to 15 lakhs
HDFC BankUp to 40 lakhs
ICICI BankUp to 20 lakhs
Kotak Mahindra BankUp to 15 lakhs
Bank of Baroda10 lakhs

Tenure

You can take a personal loan for a tenure ranging from one year to five years. Remember one thing that the longer the tenure will result in a lower amount of monthly payment, but overall at the end, you will be paying a high-interest rate.

Whereas if you take a loan of short tenure, you will be paying a high amount of monthly payment but overall it will be less as compared to the loan taken for the longer duration of time.

You can contact LoansXpert to know which option is suitable for you. LoansXpert will analyze your finances and will suggest which tenure will be comfortable for you.

Interest rates 

Many banks will offer different interest rates but it is necessary to know what all are the terms and conditions. It is very important to compare all the lenders and their personal loan and then make a wise decision regarding whom to choose.

Following is the list of personal loans offered by some banks with their interest rates.

BanksLoan amount offered
SBI11.30% to 15.55%
Bajaj Finserv 12.99% onwards
Standard Chartered Bank10.89% to 21%
Axis Bank15.75% to 24%
HDFC Bank15.50% to 21.50%
ICICI Bank10.99% to 21%
Kotak Mahindra Bank10.99% to 24%

Charges

Besides the interest rates, there are few charges that are applicable while taking a personal loan. Before applying for a personal loan, It is very beneficial to research on charges like Processing charges, Verification charges, prepayment charges, etc., of different banks.

Here are fees and charges of some banks

SBI

Processing Fee: Up to 1% plus tax.

Late Fee: 24% p.a

Pre-closure Charges: 3%

Bajaj Finserv 

Processing Fee: Up to 3.99% plus tax

Late Fee: 24% p.a

Pre-closure Charges: 4%

Standard Chartered Bank

Processing Fee: Up to 3 plus tax

Late Fee: 24% p.a + Rs. 495

Pre-closure Charges:

0 to 12 EMI- 5%

12 to 24 EMI- 4%

25 to 36 EMI- 2%

> 36 EMI – 1%

Axis Bank

Processing Fee: 1.5 % to 2% plus tax

Late Fee: 24% p.a 

Pre-closure Charges: NIL

HDFC Bank

Processing Fee: Up to 2.5% plus tax

Late Fee: 24% p.a 

Pre-closure Charges: 

Up to 12 months- not allowed

13-24 months – 4%

25-36 months-3%

>36 months- 2%

Check complete loan quotations

Check every detail in the quotation given by bank. Compare each bank’s quotations thoroughly because there might be a clause of prepayment charges

Prepayment charges are the charges that are required to be paid if you decided to pay off the balanced loan amount prior to the ending of the tenure. Some banks don’t charge prepayment fees however some do charge and it could range from 2% to 5% of the outstanding amount.

LoansXpert can compare and offer the best available personal loan

There are lots of lenders in the market who are waiting to give you a personal loan. However, selecting one is a crucial task. There are many complications related to the schemes of different lenders. 

Just don’t take the personal loan on the basis of a good relationship that you have with your bank because there are possibilities of having other banks in the market offering low-cost interest loans that that of your bank.

LoansXpert has a team of experts that will take care of all the troubles of yours in selecting the most suitable personal loan provider for you. We are passionate about researching various lenders and their personal loan schemes so that you would get the lender offering the loan with a low-interest rate.

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