How to choose the best personal loan for my needs?

Choosing a personal loan that truly fits your financial situation requires a thoughtful as well as a methodical approach. Begin by clearly identifying the true purpose of the loan and calculating the precise amount you need to borrow. This step helps prevent over-borrowing and ensures that you do not take on unnecessary debt. Next, it is very important to evaluate your repayment capacity by reviewing your monthly income and existing financial obligations. This assessment will help you determine a comfortable Equated Monthly Instalment (EMI) amount that does not strain your budget.

Interest rates are a highly important factor to consider, as they directly influence the total cost of borrowing. Personal loan interest rates typically start from 9.75%* per annum in 2025.

It is widely advisable to compare rates from different lenders to secure the favourable terms.

The tenure of the loan is equally important; while a longer tenure can lower your EMI it will cause higher overall interest payments. A shorter tenure on the other hand may increase your EMI but reduce the total interest outgo.

Also scrutinise all associated charges, including processing fees, prepayment penalties along with the late payment fees as these can impact the total expense of the loan. Make sure that you meet the eligibility criteria which generally include minimum income requirements, stable employment along with a satisfactory credit score. Utilising online EMI calculators can assist you in estimating your monthly repayments and planning your finances more effectively. Always read the loan agreement thoroughly to better understand all terms and conditions, helping you avoid hidden costs or unfavourable clauses.

Disclaimer: Personal loan interest rates are subject to change depending on your credit profile as well as the lender’s policies.