A Personal Loan helps you address any immediate need, which requires a large cash outflow. Whether you are planning a wedding in the family, a vacation, expanding your business or fulfilling unplanned medical requirements, you can get a personal loan to bridge gaps.

Such unsecured loans are easily available with minimal documentation and are quickly disbursed in most cases. However, being rash doesn’t set you up for the future, especially when it comes to finances. So, be clear on how much money you need and ensure you can repay it without stress.

Here is how you can plan your personal loan like a pro before you start shopping for a deal from banks and NBFCs.

What to Check Before You Choose the Right Personal Loan

·   Ideal Loan Amount

It is very important to decide on the right loan amount for your needs. On the one hand, ensure that the loan amount will be enough to fulfil your immediate requirement. Not having enough funds to address your needs, whether to finance a home renovation or a wedding, will upset your plans.

On the other hand, you need to be careful not to simply opt for the full amount as per your loan eligibility. Large loan amounts will result in higher EMIs and interest outflow. So, finding the right balance and choosing carefully is key.

·   Right Tenure

The loan tenure is an important matrix in determining the EMI that you will be required to pay. The best way to go ahead is to select the shortest tenure considering your finances.

This ensures that you save on excess interest payments while not burdening your monthly earnings. You can easily calculate the monthly instalments by using the EMI calculator. Once you see your potential EMIs, you can tweak the tenure to get the right figure.

Make sure you allocate some money every month for unforeseen expenses, and then see if the EMI fits your budget. Doing this calculation helps you choose a repayment duration that ensures you do not delay EMIs. This helps you boost your credit score too.

·   Rate of Interest

Apart from the loan amount and tenure, the interest rate on your loan determines the EMI that you will be required to pay. While lenders set the interest rate based on a variety of factors out of your control, there are some factors you can influence.

With a stable job, a good salary and a high credit score of over 700 or 750, you can get competitive rates on your personal loan. To ensure you get the best rate, compare the rates of different lenders online. Then choose a lender with the most nominal rate and whose eligibility terms you meet.

·   Other Charges That Apply

There are fees that are applicable on your loan apart from the interest, and many borrowers fail to take note of them. Make sure you study them carefully as they influence the cost of borrowing funds.

These charges include processing fees, part-prepayment charges, penalty charges and interest in case of late payments, document-related charges and more. Read and understand the terms and conditions of the loan carefully before selecting the lender so you are not taken by surprise later on.

·   Part-Prepayment Options

You may require a personal loan immediately while expecting to receive money within a short span of time. This could be through a bonus, a large work order or a maturing investment.

Whatever the case may be, you may want to prepay the loan fully or partially when you do receive the funds. In such cases, check if the lender offers part-prepayment or foreclosure facilities and what the conditions and related fees are.

Even in cases where you may not be expecting any money before the completion of the loan tenure, it is best to ensure that you have the option in case the opportunity presents itself.

This way, you can save on interest dues and be free of your debt obligation. Choose a lender whose policies regarding prepayment are fair and pocket friendly.

·   Seasonal or Pre-Approved Offers

Lenders run campaigns with offers for new loan applicants and for new loan requirements from past applicants. These may offer you a reduction in the processing fee or a lower interest rate.

When shopping for a personal loan, check for such seasonal offers from the various lenders in the market. Also, look for any additional benefits you can claim that can improve your experience. This can help you save more while offering you convenience.

Utilising this information, you can pick the best personal loan for yourself. Don’t be confused by what your friends or family have chosen in the past. Instead, think on your feet and make sure the loan you choose works within your budget.

For the best personal loan offers from top lenders, check the Bajaj Markets App. You can get up to ₹50 Lakhs online with a flexible tenure of up to 6 years. Download the app today on Google Play or the App Store and get the money you need to fulfil your dreams!