How to Choose a Personal Loan: Compare Interest Rate, EMI, Tenure and Charges

Understand the key factors to compare before choosing a personal loan, from interest rates and EMIs to tenure and repayment costs.

Choosing a personal loan is easier when you compare more than the amount you can borrow. You should check the personal loan interest rate, EMI, repayment tenure, applicable charges, eligibility and total repayment cost before choosing an option that fits your financial situation.

What should you check before choosing a personal loan?

Start by comparing the factors that affect what you borrow, what you repay each month and the total cost of the loan.

Factor	What you should check	Why it matters
Personal loan interest rate	Rate applicable to your offer	Affects your interest cost
Loan amount	Amount you actually need	Helps you avoid unnecessary borrowing
EMI	Monthly instalment	Helps you plan your budget
Tenure	Repayment period	Affects your EMI and total interest
Charges	Processing fee and other applicable charges	Adds to the borrowing cost
Eligibility	Income, age and credit profile	Helps you check whether you may qualify

You should review all these factors together instead of choosing a loan based on one feature alone.

Pro tip: A lower EMI does not always mean a lower-cost loan. If you select a longer tenure, your monthly instalment may reduce, but you may pay more interest over the full repayment period.

How much should you borrow?

Start with the expense you need to fund. Estimate the amount required and consider whether you need to finance the full expense or only a part of it.

For example, if you are planning a home renovation, calculate the expected renovation cost before deciding the loan amount. Similarly, for education, travel or wedding expenses, prepare an estimated budget first.

Borrowing only what you need can help you keep your EMI and total repayment manageable.

How does the personal loan interest rate affect your cost?

The personal loan interest rate determines the interest charged on the amount you borrow. The rate, loan amount and tenure together affect your EMI and total repayment.

A lower applicable rate can reduce the interest cost, while a higher rate can increase the amount you repay over the tenure. Your applicable rate may depend on factors such as your income, credit profile, loan amount and other lender-specific criteria.

With the Bajaj Finance Personal Loan, the applicable interest rate ranges from 10% to 30.5% per annum. The loan amount ranges from Rs. 40,000 to Rs. 55 lakh, subject to eligibility, verification and applicable terms.

Before accepting an offer, check the applicable rate and calculate the total amount you will repay.

How should you choose the repayment tenure?

Your tenure determines how long you will take to repay the loan. You should choose a repayment period that allows you to manage the EMI comfortably while considering the total interest payable.

A shorter tenure generally means a higher EMI and a shorter repayment period. A longer tenure can reduce the monthly EMI but may increase the total interest paid.

Bajaj Finance Personal Loan offers repayment tenures ranging from 12 months to 108 months, subject to applicable terms.

Pro tip: Compare two or three tenure options using an EMI calculator. This can help you see how the monthly EMI and total interest change when you alter the repayment period.

How can you check whether the EMI fits your budget?

Before taking a loan, look at your existing monthly commitments. Include rent, household expenses, existing EMIs, insurance, savings and other regular payments.

Then consider whether the new EMI can fit comfortably within your remaining monthly income.

Avoid choosing a higher loan amount simply because you are eligible for it. Your borrowing decision should be based on what you need and what you can repay comfortably.

When can a personal loan help you?

A personal loan can help you manage planned or urgent eligible expenses without pledging an asset as collateral. You may consider it for:

• Medical emergencies: Manage eligible medical and healthcare-related expenses when you need additional funds.
• Education expenses: Cover eligible costs such as tuition fees, course fees, books or other education-related needs.
• Travel: Fund eligible travel expenses, including flights, accommodation and other trip-related costs.
• Wedding expenses: Meet eligible wedding-related costs such as venue, catering, decorations and other arrangements.
• Home renovation: Pay for eligible renovation, repair or improvement work at your home.

For a planned expense, you can estimate the cost and repayment requirement in advance. For an urgent expense, you can first assess the amount required and then consider whether the EMI fits your budget.

Why can a personal loan be a convenient financing option?

A personal loan can be useful when you need funds without providing collateral. You can also select a repayment tenure based on your financial situation.

With the Bajaj Finance Personal Loan, you can complete the application process online and submit the required documents for verification. The loan comes with minimal documentation, quick processing and disbursal within 24 hours* after document verification, subject to eligibility and applicable terms.

You should still review the applicable interest rate, processing fee, EMI and other charges before accepting the loan offer.

Who can apply for a personal loan?

Bajaj Finance Personal Loan eligibility is based on five key criteria. Eligible salaried and self-employed applicants can apply, subject to meeting the applicable requirements.

The five eligibility criteria include:

Nationality	Indian
Age	21 years to 80 years*.
Employed with	Public, private, or MNC.
CIBIL Score	650 or higher.
Customer profile	Self-employed or Salaried

*You should be 80 years or younger, at the end of the loan tenure.

How can you apply for a personal loan online?

You can apply for a personal loan online by checking your eligibility, entering the required details, reviewing your offer, and completing the verification process.

1. Check loan eligibility - Visit the personal loan page on the Bajaj Finance website, enter the loan amount you need, select the repayment period, and click on "CHECK LOAN OFFER" to check your loan eligibility.
2. Enter personal details - Provide your personal, financial, and employment details to receive a personalised loan offer.
3. Review your loan offer - Check your offer details and adjust the loan amount or repayment tenure, if required.
4. Complete KYC verification - Verify your identity and bank details to proceed with your application.
5. Speak to a loan specialist - Once your application is submitted, an executive will contact you with the next steps.

Choosing a personal loan involves more than comparing the loan amount or interest rate. You should consider the personal loan interest rate, EMI, repayment tenure, applicable charges, eligibility and total repayment cost before accepting an offer. Borrow only what you need and choose a repayment period that fits your monthly budget. If you are considering a Bajaj Finance Personal Loan, review the applicable loan terms, charges and repayment details before completing your application.

*Terms and conditions apply.