In the current financial environment, a personal loan is a practical way to satisfy your urgent needs. It has grown into the preferred tool for many, whether it’s for planning the perfect trip, handling your finances, or advancing your career. It might be difficult to sort among the variety of lenders that are available on the market, though. It’s critical to comprehend the essential features of the top personal loan provider in order to make an informed decision.
Only 27% of the Indian population possesses financial literacy. This indicates that only one in five Indians is capable of handling one of the most vital aspects of human welfare.
In spite of India’s vast population, just 27 percent of its citizens are financially literate. The majority of Indians face several financial obstacles as a result of a lack of financial knowledge and understanding.
For example, people with limited financial literacy can require assistance. This may be for opening banking accounts, submitting loan applications, or comprehending the terms and conditions of financial goods.
8 Things to Keep in Mind While Selecting the Best Lender for Personal Loans
Interest Rate
Since the interest rate defines the true cost of debt, it is one of the most significant factors when selecting a personal loan provider. For example, ICICI Bank offers personal loans with interest rates ranging from 10.80% to 16.15% annually. In order to help borrowers obtain better interest rates, it is crucial to compare the interest rates provided by various lenders.
Charges or Fees and Transparency
Borrowers need to be aware of all extra charges and expenses associated with personal loans, along with the interest rate. The processing charges and prepayment/hidden fees imposed by many lenders can have a big effect on the total cost of the loan. The processing cost for banks like ICICI Bank, a transparent lender, is 2.50% of the loan amount plus any relevant taxes.
Choosing a lender who has an easy-to-understand fee schedule is crucial. It will help you stay away from surprises when paying back your loan. Because of ICICI Bank’s dedication to openness, borrowers are able to make better choices that are in line with their financial capacity because they are aware of all associated costs. Borrowing is more reliable and easier to handle when you choose a lender who discloses all fees up front.
Loan Size and Term
While choosing the best digital or web-based lender for personal loans, consider your financial demands. ICICI Bank, for example, offers personal loans up to Rs 50 lakh to meet a variety of needs. Furthermore, the bank offers a 12- to 72-month payback plan with flexibility. Selecting a lender who provides a suitable loan sum and repayment period for your circumstances is crucial. This guarantees a customized borrowing experience based on your unique financial situation and objectives.
Personal Loan Highlights 2024
Loan Provider | Minimum Income | Loan Amount Range | Loan Tenure Range | Interest Rate Range | CIBIL Score Requirement | Processing Fees Range |
Hero Fincorp | ₹15.00k | ₹50.00k – ₹10.00L | 12M – 60M | 9.5% – 16% | 700 or above | 1% – 5% |
Cash Out | ₹12.00k | ₹10.00k – ₹4.00L | 4M – 4M | 1.5% – 3% | 550 or above | 1.5% – 2% |
Stashfin | ₹20.00k | ₹5.00k – ₹5.00L | 9M – 36M | 2.45% – 4% | 725 or above | 2% – 2% |
KreditBee | ₹16.00k | ₹1.00k – ₹3.00L | 1D – 4M | 1.5% – 3% | 550 or above | 5% – 6% |
FlexSalary | ₹8.00k | ₹4.00k – ₹2.00L | 6M – 60M | 1.5% – 3% | 550 or above | ₹300 – ₹750 |
Mpokket | ₹9.00k | ₹500 – ₹30.00k | 1W – 4M | 2% – 4% | 550 or above | ₹50 – ₹200 |
Rk Bansal | ₹25.00k | ₹10.00k – ₹50.00k | 7D – 1M | 1% – 1% | 650 or above | – |
Werize | ₹12.00k | ₹30.00k – ₹5.00L | 12M – 36M | 15% – 22% | 650 or above | 3% – 5% |
IDFC Bank | ₹20.00k | ₹1.00L – ₹40.00L | 12M – 60M | 10.49% – 22% | 700 or above | 1% – 4% |
Aditya Birla | ₹20.00k | ₹1.00L – ₹50.00L | 12M – 84M | 12% – 28% | 650 or above | 1% – 4% |
Muthoot Finance | ₹20.00k | ₹1.00L – ₹7.50L | 12M – 60M | 14% – 22% | 685 or above | 1% – 3% |
Tata Capital | ₹25.00k | ₹75.00k – ₹25.00L | 12M – 60M | 10.5% – 14.25% | 720 or above | 0.75% – 2% |
Standard Chartered | ₹50.00k | ₹1.00L – ₹1.00cr | 12M – 60M | 11.49% – 20% | 740 or above | 1% – 3% |
Bajaj Finserv (Prime) | ₹38.00k | ₹1.00L – ₹35.00L | 12M – 84M | 13.5% – 15% | 685 or above | 0.5% – 1.5% |
Axis Bank | ₹25.00k | ₹1.00L – ₹40.00L | 12M – 60M | 11.15% – 16.25% | 690 or above | 1% – 4% |
ICICI Bank | ₹40.00k | ₹1.00L – ₹1.00cr | 12M – 72M | 10.5% – 15% | 700 or above | 0.5% – 1.5% |
Fullerton | ₹25.00k | ₹1.00L – ₹25.00L | 12M – 60M | 14% – 32% | 705 or above | 1% – 3% |
HDFC Bank | ₹25.00k | ₹1.00L – ₹1.00cr | 12M – 72M | 10.25% – 16% | 700 or above | 0.5% – 1.5% |
Loan Tap | ₹12.00k | ₹50.00k – ₹7.00L | 12M – 36M | 11% – 24% | 675 or above | 1% – 2% |
Insta Money | ₹15.00k | ₹5.00k – ₹25.00k | 1M – 6M | 13% – 36% | 650 or above | 1% – 4% |
Kotak Bank | ₹25.00k | ₹1.00L – ₹50.00L | 12M – 60M | 10.75% – 22% | 705 or above | 0.75% – 2.5% |
Cholamandalam | ₹20.00k | ₹1.00L – ₹35.00L | 6M – 60M | 14% – 22% | 675 or above | 1% – 3% |
SBM | ₹20.00k | ₹50.00k – ₹25.00L | 6M – 60M | 14% – 20% | 700 or above | 1% – 4% |
Axis Finance | ₹50.00k | ₹1.00L – ₹50.00L | 12M – 60M | 14% – 16% | 650 or above | 1% – 3% |
Internet Resources and the Application Procedure
It is crucial to assess the efficiency and smoothness of document submission. Also check the openness of the approval status tracking of the lender’s web-based application process. Modern websites improve accessibility and expedite the loan application process.
Selecting a lender with an effective and user-friendly web platform streamlines the loan application procedure in general.
Client Support
Take the lender’s customer service rating into account when selecting a lender. In order to resolve problems during the loan term, productive contacts with staff are fundamental. Choosing a lender who has established a track record of providing efficient and prompt customer service guarantees that your support network is dependable.
Reviews and Reputation
It’s crucial to do your homework, comprehend the standing of different lenders in the market, and read client testimonials before choosing a personal loan provider. A well-known financial company like ICICI Bank has gained credibility and confidence through the years. This is a testament to its dedication to providing outstanding service to its clients.
You may learn a lot about other customers’ experiences with the lender by reviewing feedback and testimonies. Selecting a lender that offers customer-focused financial services will give you confidence in your choice.
Extra Features and Advantages
It is crucial to investigate several personal loan choices in order to choose the ideal match. Take into account the extra features that raise the total loan value when choosing a lender. Seek out lenders who provide exclusive deals or loyalty programs that go above and beyond the typical advantages. Additionally, repayment choices will be catered to your particular financial condition. Your borrowing experience might be improved by selecting a lender who goes above and beyond to offer extra benefits.
Bottom Line
People with little or no financial education are more likely to fall into debt traps, make bad investment decisions, and fall prey to scams and unjust financial activities. They find it difficult to develop assets, amass money, and enhance their financial security. This adversely impacts economic growth and maintains income disparity.
Due to poor money management, people accrue loans, credit card debt, and unpaid payments, which puts them in a difficult financial situation. Retirement planning is hampered by low financial knowledge, which leaves people insecure and without funds. Lack of financial awareness makes it difficult to put money aside for emergencies, which worsens financial difficulties when unforeseen circumstances arise.