Whenever you find yourself facing a financial crunch, opting for a loan to get you out of it could be the ideal solution. To find the best loan for you, you need to address the reason for taking it. If you are looking to buy a home, a Home Loan is what you want. If you have an eye on a car, an auto loan would serve you well. If you are facing anything else, a Personal Loan might be just what you need.
With a Personal Loan, you get the benefit of being able to use the money for whatever purpose you want. To fund a vacation, aid in education, or help pay for a wedding, a Personal Loan is easy to come by and effective to use.
What comes with a Personal Loan
Since most Personal Loans are unsecured, they come tied to higher interest rates than other loans. These loans generally have a tenure ranging between 1 and 5 years. So, when you are looking to find the best Personal Loan in India, you will need to factor in certain elements. A balance between the rate of interest charged and the tenure would result in a reasonable EMI, which, in turn, would ease your financial responsibilities instead of adding to it.
So, instead of just fiddling with a Personal Loan EMI calculator online, make sure you see whether you’ve addressed the below points, on your search for the best deals in the market.
What affects the quality of your Personal Loan deal
- Relationship with the bank or NBFC
If you have a pre-existent relationship with the financier, then you will be in a better position to negotiate the terms of your loan. You would be able to bring the interest rate down to a number that you can afford, determine a decent tenure, and get a good-sized loan sanctioned, all because of the relationship you have with your bank or NBFC.
- Credit history
You credit track record plays a very important role when it comes to Personal Loan benefits. If you have a good, stable credit history then, odds are, you will get a better interest rate. To ensure you have a good credit history, you will need to always pay your bills on time and not procrastinate when it comes to settling your debts. There are some of the tips how to improve credit score.
- Repayment capacity
Your credit history points to your past with finances, your repayment capability calls to light your present condition. Your income and your employment status are evaluated to make sure you will financially be able to repay what your borrow.
With the help of an online loan calculator, you will be able to get an idea about how a loan will affect your budget. Factor that in when looking for your ideal Personal Loan. At the end of the day, choose a plan that best suits when you apply for personal loan, and make sure you don’t hurt your credit score, which you will need in the future, by defaulting on your EMIs.