How to Choose the Best Personal Loan




Personal loans can be used for tuition fees, debt consolidation and even a car. Banks have their own specific criteria, but as a universal law - if it's lawful, one can have a loan for it.

For having quick financing any needs of us, personal loan is the best source. Despite being easy and faster to acquire it is the riskiest loan available. Therefore caution must be taken. With high interest it may be difficult to pay back in time as it has the shortest loan tenure compared to other loan.

Now what we just need is some few tricks to shop a personal loan. Where interest rates, loan tenure, loan amount and other additional cost have to be considered.

Therefore, the following factors should not be overlooked while choosing the personal loan:

Loan Amount and Interest

Maximum loan must be checked first while checking each banks’ offerings. The interest rates differ depending on the loan amount but avoid anything above 10% if it is probable. For examples in Bangladesh, in HSBC bank says about the personal loan amount as “the loan amount ranges from BDT50, 000 to BDT1000,000 or maximum 10*-(14 times, in case of partially secured loan) times your monthly income, whichever is lower. However, in all cases the total approved amount will be within 30% of the total value of the goods / services availed through this financing.”

Loan Tenure

Loan Tenure refers to the time frame you are given to pay back the loan. Personal Loan are usually offered with the shortest loan tenure. Usually it is ten years. But most of the bank offers less than this. Again different banks comes up with different loan tenure.

Other costs

Additional cost may be there besides interests. Some personal funding packages necessitate dispensation fees, stamp duty and disbursement and other miscellaneous fees. These are all one-time cost to be paid before pay out. Different banks also charge late payment fees which is a certain percentage of the loan amount.

Approval duration

For quick cash, this can be a deal. In line for to rigid competition among banks, the approval duration for this type of loan can be as short as one hour or up to seven business days.

Requirements

Some loans may be limited for full-time employees, while others may be open to public servants and self-employed folks. Debtors may also be required to have a associated savings account at the bank before they can apply for a personal loan with the bank. One have to be at least 18 years old but below 60 years old.

Using SmartKomapare's loan calculator one can compare and reflect all the loans and options. One can make a smooth choice while choosing a personal loan with it. Anyone one borrowing responsibly and paying the loan back in a timely manner won’t see hassle.

Recommened reading: 5 things to consider to choose a personal loan.

Navid Abdullah Gofran এর ছবি

About the Author

About: 

Navid Abdullah Gofran is a freelance writer, director and editor at CYDS. Currently he is studying at BRAC University.