A personal loan is an amount that you lend from a bank or a finance company to fulfill your personal needs and repay it in small installments. Your personal needs could be a vacation, home renovation, marriage, purchasing goods, and allied others.
A requirement of a personal loan comes from any village, town, or city. You need a personal loan in Bangalore if you live in this city. When you look for a personal loan in this IT city, you can come across several banks and NBFCs (non-banking financial companies). The availability of so many options makes it hard to decide which is the best finance company for a personal loan in Bangalore.
No one can state that a particular finance company or bank is the best for your personal loan needs. Someone can guide you, but it is you who have to decide which is the best for you. And for the right selection, you need to take every step carefully and think of all the associated aspects/factors.
Here are the aspects you should consider in the selection of the best finance company for a personal loan you need in Bangalore:
Age:
Your age has a greater influence on the approval of your loan application that you submit to a bank or NBFC. Usually, the minimum age requirement for a personal loan is 21 years and the maximum is 60 years. Some banks approve the loan applications of the individuals who are more than 25 years old. Your maximum age could be 76 if you are a pension holder.
Minimum Income:
It is the basic requirement of any loan. Your income guarantees your lender that you will be able to pay the loan amount you are going to lend from a banking or non-banking company. The minimum income range varies from one finance company to another and one location (residential city) to another. It can be Rs 10000 to Rs 30000 a month. Your income must be at least Rs 10000 a month if you are going to apply for a personal loan from any Banks.
Interest Rates:
Interest rates have a direct influence on your repayment. Higher interest rates mean higher repayment amounts. So, you need to be very clear about the interest rates before applying for a personal loan in Bangalore. Have a close look at the interest rates of all the leading finance companies offering personal loans. In your study, you will find that the interest rates on personal loans range from 10.75 to 26% a year depending on the loan amount and finance company.
CIBIL Score:
A good CIBIL score is needed when you start looking for a personal loan in Bangalore. Usually, a credit score between 300 and 900 is considered as a good CIBIL score. The more credit score you have, the more chances of loan approval you have. In simple words, you need to have a CIBIL score of more than 700 if you are applying for a personal loan of Rs 100000 or above.
Maximum Credit Amount:
Suppose that a leading financial company, such as Money View, is willing to offer a personal loan of upto Rs 5 lakhs to potential borrowers. It is essential for you to know your exact required amount and capability to repay the same. To determine your credit amount, you can take a look at your debt to income ratio (FOIR). As far as possible, avoid borrowing more in comparison with your needs. Because, it can create an extra financial burden for you via EMIs and enhanced loan cost.
Tenure for Repayment:
Typically, a shorter loan tenure costs you lower and a long loan tenure costs you higher in terms of interests. A loan tenure differs from one financial institution to another and ranges from 12 to 84 months or more. Money View offers a personal loan of upto Rs 5 Lakhs To calculate the exact loan tenure for you, know your exact monthly income, determine the loan amount, calculate interest rate, access your future financial plan and use your personal EMI calculator.
Processing Fees:
Processing fees are the amount that you have to pay a financial institution/bank to lend a loan. Some financial institutions don’t take any processing fees while some charge 0.8 to 2.5 % of the loan amount. The financial company is the best for you if one takes no or the lowest processing fees. Money View charges only 2% of the loan amount as processing fees. Explore in detail before moving ahead.
Lowest EMI
Usually, EMI is calculated on the base of your loan amount and the tenure you opt for repayment. For the calculation of the right EMI, you need to keep all things such as loan amount, your future financial plan, and your capability to repay the amount in mind. Lower EMI means you will have a long loan tenure and a long loan tenure means you will have to pay higher interest rates. Study all the loan options and choose the one that offers the lowest EMI without extra financial burden.
Prepayment Charges
Some of you get ready to pay your loan amount earlier than predetermined tenure. In this case, a financial institution typically charges a small amount as a prepayment charge. It is 0 to 5% of the left loan amount You need to know the prepayment charges before you finalize a personal loan.
Conclusion: A finance company is the best one for your personal loan if it meets your requirement on all the set aspects/parameters, from loan amount to tenure EMI and prepayment charges. Be very careful while applying for it.
Author Bio: Surya Patra is a qualified webmaster by profession and Marathon Runner/Cyclist by passion with more than 6+ years of expertise in the financial domain. Surya is also an entrepreneur, enthusiastic in storytelling, content writing, and digital marketing professional.
