If you’re planning to take a personal loan to address any Covid-fuelled liquidity requirement, do ensure to compare your options across different lenders to find the one that offers the best repayment terms like lowest interest rates.
A personal loan could come to the rescue of the cash-strapped while also helping a borrower to accomplish his life goals. This collateral-less, no-frills and open-ended financing facility when repaid on time would also help improve the borrower’s credit history. If you’re planning to take one to address any Covid-fuelled liquidity requirement, do ensure to compare your options across different lenders to find the one that offers the best repayment terms like lowest interest rates.
Also, factor in other associated charges like processing fee and prepayment and part-prepayment charges in your calculations. A personal loan could also be a great option if the maximum loan amount you’re eligible for is bigger than the value of a security that you could pledge in order to get a secured loan, according to Bankbazaar.
However, you must also realise that your credit score plays an extremely crucial role while you apply for a personal loan. If your credit score is poor, you might not be eligible to get a personal loan, and even if you do, the applicable interest rate would be much higher than those offered to applicants with credit scores over 750-800.
Also, your income will be taken into consideration by the banks to ascertain your maximum personal loan amount and applicable interest rate. The document requirements would be different for salaried and self-employed loan applicants. That said, also look for any pre-approved personal loan offers by your bank for prudential rates and quick loan disbursal.
If a personal loan doesn’t work for you, you might also explore other financing options like gold loans, loans against securities, overdrafts, loans against property, loans against car or insurance policies, credit card-linked pre-approved loans, micro-loans, etc. after due diligence to best meet your requirements, Bankbazaar says.
However, whichever financing facility you choose, ensure you have a repayment plan in place to avoid additional interest penalties, debt accumulation, and the loss of a precious asset or a damaged credit score. If you’re looking for a personal loan, here are 10 banks — including SBI, PNB and Bank of Baroda — that are currently offering the lowest interest rates: