Look beyond interest rate and amount while applying for a personal loan

3 MinsSep 21, 2020

Rajan needed Rs 5 lakh for his father’s emergency heart surgery. Since he was short of cash, he decided to take a personal loan to meet the emergency expense. He sought a loan from a bank that offered him a personal loan at an extremely competitive rate. But the bank fairly took long time to process his loan application. Since Rajan needed funds in a hurry, he had to borrow from his friends.

In the pursuit of the lowest rate if your loan approval takes long, then it may not serve your purpose. Here is a list of factors that you should always check while applying for a personal loan to ensure that you get the funds with minimum hassle.

personal loan

Interest Rate

This is critical while applying for a loan. Hence, do thorough research and compare the rates. Since the rate remains unchanged during the entire loan tenure, it makes sense to opt for the lowest rate possible. This will ensure a lower repayment amount. In most cases, the bank where you have your salary account or a savings bank account may offer you the best rate. As you have an established relationship with the bank, the bank is aware of your financial status or income status. However, the interest rate cannot be the only criterion while applying for a personal loan. 

Time for processing and disbursal

How long will the lender take to process the loan application and disburse the loan? As Rajan’s case shows, in an emergency, this can be a crucial aspect to consider. He was lucky that he could borrow the required funds from his friends and family, but that option may not be available to everyone. Hence, it is important to consider this, as well.

[Also Read: How a Personal Loan can help in debt consolidation]

Easy to apply

Since a personal loan is something that many of us avail of in an emergency, one should also consider how easy or convenient the application procedure is. A bank that allows you to apply online with minimum documentation may also be faster at processing the loan. If the bank asks for too many documents or requires you to fill multiple forms, it will eat into the time for processing the loan and delay the sanction and approval. For instance, 24x7 Personal Loans from Axis Bank offers you a digital experience, instant sanction and quick disbursal of funds, with minimum or no paperwork.

Processing Fees

While interest rates get all the attention from borrowers, they tend to ignore processing fee. This is so a key element to take into account as it adds to the total cost of funds. Processing fees may be a percentage of the loan amount or a flat fee. Also, check if the amount will be paid out to you after deducting the fees or if you have to pay the fee separately to the bank. If it is the latter, you will have to make provision for the fees. 


Your loan tenure is a significant factor in your interest payments. The longer the loan tenure, the more you pay in interest. On the other hand, a longer tenure would mean lower Equated Monthly Instalments (EMIs). If the bank offers a wide-ranging tenure for the loan, you can plan your EMIs accordingly and in such a way that it does not put undue strain on your monthly budget. Figure about the best balance between tenure and EMI amount that works for you. 

Axis Bank offers Personal Loans from Rs 50,000 up to Rs 15 lakh with minimal documentation and speedy approval. Also, you can transfer your existing high-interest Personal Loan to Axis Bank as well. The repayment tenure can range from anywhere between 12 to 60 months. 

Click on a link to apply for an Axis Bank Personal Loan. To calculate the indicative EMI on your loan, use our Personal Loan EMI Calculator online.

Disclaimer: The Source, a Mumbai-based content creation, and curation firm have authored this article. Axis Bank does not influence the views of the author in any way. Axis Bank and The Source shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.