Best Personal Loan in India Explained

Ways to select best Personal Loan in India

Key Takeaways

Personal Loans are unsecured loans that need no pledging of collateral.
To choose the best Personal Loan, you must do thorough research of features offered by different lenders.
Costs such as interest rates, late payment charges, prepayment charges can affect your overall loan amount.
The higher the tenure of the loan, the lesser would be the EMI amount you pay.
Pre-approved customers can enjoy instant disbursals of the Personal Loan amount.

A Personal Loan is a versatile loan that can offer you quick cash. It is an unsecured loan; therefore, you need not pledge collateral against the loan. Moreover, unlike home loans or car loans, you can use the loan amount to finance any expense of your choice. For instance, you can plan a vacation, undertake home renovations, consolidate debts, fund medical emergencies, etc. With no shortage of lenders, it could get cumbersome to choose one. Here are some ways to choose the best Personal Loan in India.

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How To Choose the Best Personal Loan?

Compare Interest Rates

Personal Loan interest rates affect the total cost of your loan. Undoubtedly, the best personal loans are the ones with reasonable interest rates. You can research the Interest rates offered by various lenders on their website and choose the one with the lowest interest rate.

Compare Tenures

Personal Loans come with flexible tenures, which you can repay in Equated Monthly Instalments (EMIs). The number of EMIs you have to pay and the EMI amount depends on the loan tenure. A lower repayment term typically translates to a higher EMI amount. The best Personal Loan is one where your EMI amount and repayment tenures are balanced.

Check the Fees & Charges

Look for loans with lower processing fees. Some lenders will charge a nominal fee if you prepay the loan amount. Loans with lower costs can be considered as the best Personal Loan in India.

Check the required Credit Score

Lenders do not ask for collateral against Personal Loans. However, they expect borrowers to have a good credit score and credit history. Check for lenders who do not insist on excessively high credit scores.

Check For Documentation Requirements

The best online personal loans are those which are processed with minimum documentation. Choose a financial institution that asks you to provide scanned copies of your ID, address, and income proof documents instead of physical documents to sanction your Personal Loan application.

Consider Loan Disbursal Timeframes

Loyal bank customers can enjoy pre-approved loans, i.e., the loan amount gets disbursed into your bank account/savings account almost instantly. Get in touch with your bank to check the eligibility for pre-approved, Instant Personal Loans.

Check the cancellation Policy

Few banks offer a 48-hour freelook period in which you can cancel your loan after it has been disbursed into your bank account. As such, a loan that allows you to change your mind can prove to be a great choice.

Final Note

Personal Loans are an excellent option for availing of urgent cash, and you can find several lenders willing to sanction your loan application. Today, most loans are processed digitally. Thus, you do not need to visit the bank branch; you can apply for the loan online directly through the lender’s website. Ensure you do your research to analyse the best online Personal Loans.

Download the digibank mobile app on your smartphone. Launch the app and click on the "Get Personal Loan" link on the login page.

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*Disclaimer: This article is for information purposes only. We recommend you get in touch with your income tax advisor or CA for expert advice.