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How to Compare Various Personal Loan Offers?

Updated on: 14 Dec 2021 // 26 min read // Personal Loans
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Undoubtedly Personal Loans are a one-stop solution for a wide array of monetary problems you face in life. Right from helping you meet immediate financial needs such as those occurring due to medical emergencies or home improvement, wedding, education of a child, Personal Loans are readily available for anyone who has a stable income source to back the loan repayments. Other factors, such as its unsecured nature, freedom of end-use, quick disbursal, flexible repayment terms, and more contribute to the popularity of this credit product.

However, not all personal loan products are ideal for you. It is crucial that you compare various Personal Loans Online and carefully pick the one that suits you perfectly fine. Here are a few aspects that you must pay due diligence when comparing and choosing a Personal Loan.

Personal Loan Online

  • Be Clear Regarding the Use of the Loan Amount

    While it is not mandatory to state the purpose of your Personal Loan to the lender, it is recommended to contemplate the same before applying for the same. If you are upfront about the end use of the loan amount, the lender can help you with a customised loan that comes with added benefits. For instance, if you’re taking a small loan, say for travel, you wouldn’t want to pay EMIs for many years to come. In this case, it would be better to go for a loan that offers repayment flexibility, with little or no penalty on foreclosure. This would impart you the freedom to close the loan at the earliest possible.  Similarly, if you’re taking a big-ticket loan for sponsoring your child’s education, you should opt for a lender who can readily offer a higher loan amount for your profile.

  • Take a Note of the Processing Fee

    Every lender levies a processing fee on loan, which is usually a small percentage of the principal amount. The processing fee for Personal Loans usually ranges from 0.5% to 3% of the loan amount. In the first look, this may seem like a trivial number; however, when the loan amount is higher, this fee can mount up quickly. For instance, the processing fee for IDBI Bank Personal Loan is 1%, which comes to Rs. 10,000 for a loan amount of Rs. 10,00,000. However, the same fee for SBI Personal Loan can go up to Rs. 30,000 (at 3%), which is quite a substantial difference.

  • Know the Interest Rate

    While most lenders explicitly state the rate of interest they charge on loans, some do not mention the type of interest rate. You must know that there are two types of interest rates –Fixed and Reducing. In case of a fixed interest rate, your EMI will stay constant, despite the reducing principle. Therefore, this interest type almost always proves to be more expensive. On the other hand, when you opt for a lender who offers a Reducing Interest Rate, you enjoy a cost-effective loan, as the interest is only charged on the reducing principle after each EMI payment.  This is, for instance, true with Corporation Bank Personal Loan, wherein the reducing interest rates start from 11% onwards, depending on your credit history and repayment ability.

  • Know the Prepayment and Foreclosure Charges

    More often than not, a Personal Loan is a means to fund some immediate financial needs. Hence, there may be a possibility that you wouldn’t need to service the entire tenure of the loan and that you can pay it off earlier than the stipulated date. This will not only help take off a financial burden from your shoulders but will also ensure that you save a significant amount of money that would otherwise go towards the interest. However, most lenders levy a prepayment or foreclosure charge, in a bid to discourage you from paying off the loan at an early stage. This may increase the overall cost of the loan for you. Therefore, you must take a close look at the prepayment and foreclosure charges levied by the lender, as well as the rules pertaining to these facilities before zeroing in on a lender. This will benefit your financial planning during the tenure.

Personal Loan Offers

Now that you’re aware of the aspects that need your due diligence when comparing Personal Loan offers, here is a consolidated list of the leading commercial banks and NBFCs across India. We will also walk you through Personal Loan Interest Rates, processing fees, and the maximum loan amount offers.

Name of the Bank/NBFCPersonal Loan Interest Rate (per annum)Processing FeeMaximum Loan Amount

SBI

12.50% to  16.60%

2 to 3%

Rs. 20 Lakhs

HDFC Bank

10.75% to 21.30%

Up to 2.5%

Rs. 40 Lakhs

ICICI Bank

11.25% to 17.99%

0.99 to 2.25%

Rs. 20 Lakhs

Citibank

10.99% to 17.99%

Up to 0.5%

Rs. 30 Lakhs

Axis Bank

11.25% to 24%

1.5 to 2%

Rs. 15 Lakhs

Bajaj Finserv

11.99% to 15.50%

1.5 to 3%

Rs. 25 Lakhs

IndusInd Bank

11% to 20%

1 to 2.5%

Rs. 25 Lakhs

Kotak Bank

10.50% to 19.99%

Up to 2.5%

Rs. 15Lakhs

Punjab National Bank

12%  to 15%

1.8%

Rs. 15 Lakhs

IDBI Bank

Undisclosed

1%

Rs. 10 Lakhs

Corporation Bank

11% onwards

1.5% (Min-Rs.500)

Rs. 3.50 Lakhs

Based on your requirements, you must choose the best match and make an informed decision.

Also Read: Top Ten Factors that Determine Your Personal Loan Interest Rates

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