5 Tips on Finding The Best Personal Loan

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5 Tips on Finding the Best Personal Loan

With so many lenders offering loan packages online, sometimes choosing the best loan and lender becomes challenging. Besides, when you choose one, you can never be sure that it's the best personal loan for you. 

If you want to make sure that you only get the best loan option, you might want to consider these tips below. They will guide you in selecting the best-suited personal loan package for you. 

Check the Loan’s Interest Rate

You'll know that the loan is the best option for you because of its interest rate. It should be what you will look for first. A personal loan with the most affordable interest rate should always be your option, even if it only has a slight difference.

You have to know that no matter how slight the percentage difference is, it'll significantly impact the total amount of the loan over time. You'll notice that financial institutions greatly vary regarding interest rates. 

Conduct thorough research and look for each institution’s loan interest rate and compare them. Whichever offers the lowest interest rate should be the one you choose.

Know the EMI of the Loan 

Knowing the EMI or the Equated Monthly Installment is essential when choosing the best personal loan. The EMI is the amount that will be paid by the borrower to the lender every month.

The EMI applies to the principal amount and the interest rate imposed monthly. When choosing the best personal loan, you should identify whether you can afford its EMI.

If you acquire a personal loan with an EMI that's way above your ability to pay, you'll likely have difficulty with repayments. In the end, you'll be hurting your finances and dragging your credit score down.

So, before deciding which loan to acquire, you shouldn't forget to check out the EMI. Make this a habit every time you apply for a loan, and you can be assured of having the best loan each time.

Ask For the Eligibility Criteria 

Lenders often demand hard-to-meet requirements, even with an excellent credit score. Therefore, if you want to get the best loan, you must look for lenders who ask for easy-to-meet requirements. For example, you won't have to do the impossible to qualify for installment loans from CreditNinja.

If you notice that the eligibility criteria are difficult to meet, you should stay away from that loan offer. 

Never attempt to apply for the said loan. Remember that you have to avoid mass applying for a loan as lenders will conduct hard inquiries, which could affect your credit score. 

Consider the Repayment Flexibility 

Check out the loan’s repayment flexibility, as most personal loans offer full or partial prepayment charges.

A loan with a flexible repayment will give you the chance to pay a small amount of charge if you choose to pay off the outstanding amount before the term ends. Some lenders won't give you this kind of flexibility, and those kinds of lenders are the ones you should avoid. 

Choosing a loan with repayment flexibility will help you lessen your debt burden if you decide to pay it off in advance. 

Ask About Charges 

Aside from the interest rate, there are other additional payments a loan will require from you. Lenders imposed extra fees that you should watch out for.  

You can inquire about these additional fees to understand them better and ask questions about their charges. Below are the typical personal loan charges that you must know about.

  • Application Fee
  • Origination Fee
  • Late Payment Fee
  • Prepayment Penalty
  • Returned check fee
  • Payment protection insurance

If you see charges other than what was mentioned, you should think twice about acquiring that loan. You'll also need to compare loans according to these fees. 

Take Your Time in Shopping for a Loan 

Never rush in acquiring a loan no matter how badly you need the money. It'll benefit you more if you spend time searching for the best loan offer. Now that you have these tips as a guide, you can ensure that you get the best loan that fits your needs.

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