Wednesday, 16 November 2016

How Can I Get Best Deal on a Personal Loan?

In a perfect world no would need to borrow money for anything. However, truth is we don't live in one.  Majority of us would need to get a personal loan in life, at some point or the other.  Fortunately, banks and NBFCs have made it quite easy and simple to apply for a loan. Not only that, they often roll out exciting offers, such as low interest rates, flexible repayment options, etc. to attract their customers. You can even go for P2P (Peer to Peer) loaning options, that allow you to apply for a loan on the Internet, and get funds within a day or two. However, when so many options are available, it certainly begs the question- "how do you get the best deal on a personal loan?".

There are a lot of things that you can do to ensure you get the best possible deal on a personal loan. Some of these include:
There is a lot of competition in the banking sector today. Banks are vying against each other in the bid to attract customers towards personal loans. Thus, you can notice a considerable difference in the interest rates offered by different banks. The terms and conditions may also vary greatly. Thus, if you want to secure the best possible deal on a personal loan, it is important that you perform a through comparison among all the viable banks. 
Establishing the Upper Hand
You can only expect a good deal when you can prove that you have high creditworthiness. The easier you will make it for a bank to trust you, the easier it is to get a good deal. If you are going after a traditional bank for the loan, then your credit score will play a significant role in the process. Thus, by working on your score beforehand you can have the upper hand when negotiating rates with a bank. With a promising credit report you can take advantage of leverage, and convince the bank to offer lower rates.
Grabbing Seasonal Offers
If it is possible, you can wait for a festive season before applying for a personal loan. This is because a lot of banks release attractive seasonal offers. In fact, thanks to the tough market, banks have begun to implement all kinds of marketing techniques to increase the no. of sanctioned loans per quarter. If you can just wait for the right time, and thus the right offer, you may get the best deal on a personal loan.
Checking Out Online Lenders
Online lenders are giving tough competition to the traditional banks and NBFCs today. Whether it is about interest rates, tenure flexibility, or the entire process of obtaining the loan itself, they are able to excel in everything. Thus, you can check out if you quality for an online loan, and compare it with the traditional counterparts. Since there are plenty of online lenders that have emerged lately, you can compare them too.
Understanding The Method of Interest Calculation
If a bank or NBFC is offering you a personal loan at a really low interest rate, then make sure you go through the full details before signing up for it impulsively. Sometimes, to trick customers banks offer low interest rates, but these are flat rates, which don't consider gradual reduction of principal amount, and the interest amount.
What you should ideally seek in a personal loan is a diminishing rate, rather than a flat rate. With a diminishing rate, your interest amount gets smaller and smaller as you pay your EMIs. This is because the interest is calculated on the outstanding balance, which gets smaller with time. 
A loan is a huge financial responsibility, and since it stays with you for many years, it helps to get the best deal possible. In fact, the same goes for a home loan, higher education loan, used car loan, or any other kind of loan. Thankfully, with the help of Internet you can do enough research to find a loan that fits your budget, and your financial situation. At any rate, having a good CIBIL score always helps when dealing with a lender. So, make sure you have a good one before you get on board.


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