Looking For A Personal Loan? Here Are The Top 7 Things You Should Know

*This is in paid partnership with Bajaj Finance

When you’re looking to bridge a financial gap, a personal loan can be a handy tool. You can use these loans as a stepping stone towards fulfilling your dreams, from a wedding to educational expenses or even a holiday.

However, before signing any documents, there are important factors to bear in mind. Let’s break down seven essential considerations—from interest rates to repayments to hidden fees—and see why Bajaj Finance stands out as a lender of choice when it comes to personal loans.

1. Choosing A Lender

Personal loans are offered by various financial institutions in India, including public and private sector banks, online lenders and non-banking financial companies such as Bajaj Finance. One must pay attention to interest rates, fees and repayment options offered by the lender, as well as its past track record. Good reviews from previous borrowers can be a beacon when choosing a lender.

2. Timeliness Matters: Quick Disbursement

In critical financial needs, the speed of loan disbursement can be a game-changer. For instance, Bajaj Finance offers instant personal loans online, and in many cases, money gets credited to the bank account within 24 hours*. If you need cash fast, this is a significant factor.

3. Loan Amount And Interest Rate

Before applying, think about how much you truly need to borrow, because EMI payments rest on it. Bajaj Finance allows you to manage both small and large funding needs with loans ranging from Rs. 20,000 to Rs. 40 lakh. Depending on your income and credit score, your eligibility might differ.

When it comes to interest rates, a lower rate means you’ll pay less overall interest over time, while a higher rate can make your loan more expensive. Fixed interest rate stays the same throughout the tenure, making budgeting easier. However, it may be slightly higher than the floating rate. If the current rate suits you and it’s expected to increase, choose a fixed rate. A floating rate may be better if interest rates are expected to reduce.

4. Loan Application: Simplicity Matters

A simple, online loan application process makes a world of difference. For applying, you would need the necessary documents, which include KYC such as Aadhaar/voter ID/passport, PAN card, income proof and bank statements. Bajaj Finance has an extremely simple application procedure, wherein you can choose loan types, tenures and fill out forms on online portals. Once your application is assessed and documents verified, it’s only a matter of time that funds are in your account.

5. Repayment/Prepayment: The Time Factor

Most lenders offer loan tenures ranging from 1-5 years, whereas you can go up to 96 months with Bajaj Finance, which makes your EMI amount considerably lighter on the pocket. If you find yourself with some extra cash, you can repay part or all of your loan early. Just check if there are any prepayment/foreclosure charges or penalties.

6. Fees And Charges: The Fine Print

Processing fees, late payment penalties and prepayment charges can quickly add up. Always read the fine print. Ask about all applicable fees upfront to understand the total cost. Transparency is key in financial matters. In the case of Bajaj Finance, all charges and fees are clearly mentioned on the personal loan app page and loan documents, so there are no surprises later.

7. Technology/User Experience

Online applications, mobile apps and 24/7 customer support can all make your overall experience smoother. Check if the lender offers features like flexible repayment options, online tracking of your loan status and easy access to customer service. Tech features like an easy-to-use personal loan EMI calculator by Bajaj Finance ensure you don’t leave loan calculations to chance. Just input your loan type, amount and tenure, and you get a detailed breakdown of your monthly payments.

With so many different lenders to select from, the choice boils down to the key considerations discussed above. With availability of up to Rs. 40 lakh, flexible repayment tenure, ultra-fast disbursements, no need for a guarantor or collateral, and no hidden charges, it doesn’t come as a surprise that Bajaj Finance stands out as a leading lender on the most critical parameters when considering a personal loan.

*Terms and conditions apply.