I am 41 years married with 2 children and reside in Shivamogga. Recently I fell into difficulty and approached a private bank for a personal loan of INR 2 Lakhs. They offered me a loan at an interest of 13%. I was surprised to find that my home bank was charging me more than some of the other private players whom I approached. This is the first time I am taking a personal loan of any kind. Is interest rate the only factor while deciding on the lender or is there something else I need to see? Please advise?
Choosing the right lender to avail a loan depends on multiple factors, but interest rate is definitely an important one. You also need to check the tenure of the loan, eligibility in terms of loan offered, processing charges, penalties, speed of disbursal while deciding on a lender. 1. It is possible in certain scenarios that the rates offered by some banks may be better than your home bank. You must compare other parameters like tenure, processing charges and so on across the lending institutions, then align your priorities and finally make the choice. 2. you can also negotiate with your home bank and see if they are ready to revise the loan rates, given your existing relationship with the bank. 3. If you are FD's in the bank, you make consider availing a loan against them. This is a secured loan and you are charged a much lower rate than personal loan. You can avail a loan against your fixed deposit to the extent of 80-90% of its value. Most of the banks adjust the time to repay your loan in line with the maturity of the fixed deposit. The real benefit of this loan is you don't need to liquidate your FD, you just need to pledge it.