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Personal loan: A Brief Overview
From losing a key chain to losing your laptop, any problem can be solved in our lives. Be it mental stress or a financial crisis at home, it can be overcome. Nowadays, lack of money is not something to worry about. It can be a piece of cake for a common man with the help of Personal Loan. You wish to spend quality time with your family and your savings do not cover the expenses, you may avail the Creditseva scores to take a Personal loan. This way you will not fail the expectations of your family.
Features and Benefits of Personal Loan:
Personal loans are credits offered by public and private banking services to help people in fulfilling their dreams. Personal loans could help you to consolidate your debts or to renovate your home or rather for covering your medical expenses. These are rather few of the most fundamental reasons for which one can opt for a personal loan. But whenever taking a personal loan, always remember that when you borrow cash, you are logically borrowing from your own future. That is because you have to repay the amount with interest in a given time. So, it is very important that you apply for personal loans just for the most practical and vulnerable reasons. Experts warn against borrowing things or products you really cannot afford.
Key features of Personal Loans are:
- Not all but only self-employed and salary individuals can opt for personal loans.
- There are options for EMIs
- Personal loans are tension free as they do not have any security or guarantors.
- Various banks offer loans where the tenure of repayment is very flexible.
- Availing personal loans includes minimum documentation, very simple procedure and quick approval.
- Loan amount varies according to the eligibility of individuals.
The key benefits would be:
- The freedom to use funds when needed: Unlike other loan options, personal loans can be used freely by the user as per his/her needs.
- No need of any kind of security: You need not require any security to be mortgaged with the bank for the approval of a personal loan.
- Flexible tenure: The tenure provided by the bank to repay the loan is quite broad. Personal loans are available from 12 months to 60 months unlike credit card loan or gold loan.
- Minimum paper work: A personal loan requires minimum documentation and is often approved within 48 hours of submitting an application.
Now that you are all set for your personal loans, we are sure there are a few questions arising in your minds. Here are some of the questions which are frequently asked. Hope it will be of some help to you.
1) What is personal loan?
Whenever you have an urgent need of cash, personal loan is the best way to take care of your cash crunch at a reasonable rate of interest. You don’t have to give any security or collateral to the bank. Normally, the bank does not ask for guarantors. Once you submit your application form and supporting documents, banks give approval within 72 hours to a maximum of seven days, provided that everything is in order. Loan approval happens with minimum documentation and if you are an existing customer of the bank then even those documents are not required. All loan approvals are at the sole discretion of the bank. The bank is not concerned with the end use of the loan, but you need to furnish enough proof to show your capability to repay the loan.
2) For what all purposes, can a personal loan be availed?
We can avail a Personal Loan for all and sundry. There are no limitations for the same. You can make use of the loan money to invest on anything from your daughter’s marriage to a holiday abroad. The bank is not concerned with the end use of the loan, if you have furnished enough proof to show your capability to repay the loan.
3) How do I avail for a personal loan?
You can avail a loan from a bank of your choice only after going through the best interest rates that the different banks offer. You should also check with the bank in which you have your salary account, for special discounts. You can negotiate the rate with your bank. Also, enquire about the eligibility criteria and the required documents required before applying for the loan.
4) What determines my loan eligibility?
You can take a loan from any bank you like but start by checking out the best interests rate that the different banks have to offer. Go through the rules and regulations of the particular bank to know your eligibility or you can ask by calling in the customer care of the bank.
5) What is maximum period to repay a personal loan?
Personal loan is a loan which is available for a short tenure or period. Nearly all banks provide you loan for a minimum of one year to a maximum of five years.
6) What is the maximum personal loan amount I can avail?
The amount of loan that you can apply for ranges from Rs.50,000 to Rs.15,00,000 depending on your capacity to repay. It will also depend on the documents you furnish, place of work, residence, city you live in. Also, the installments paid by you should not exceed more than 30-40 % of your net income or 2-3 times of the return of your income tax.
7) When and what are the charges/fees payable?
The bank charges a Processing Fee ranging from 2%-3% of the loan amount when you apply for the loan. The best is to negotiate these charges with the bank. You should also negotiate on the interest rate with the bank. Other than that, there is the prepayment penalty which varies from 2%-5 % which is paid at the time of closing the loan before the given tenure. This is because the banks primarily earn from the interest rate they charge you. As in the case of processing charges or fees, you can also make the fees get reduced.
8) What are the interest rates that might be levied while taking a personal loan?
The rate of interest differs from one bank to another. Generally, it ranges from 14%-25% according to your profile, kind of job and place of work, residence and city you live in. The most important factor is your repayment capacity.
9) When can I get my loan amount?
Depending on the documents that you furnish, the banks can take 72 hours to a maximum week to disburse the loan amount. So, it is advised that all your necessary documents are in proper order to avoid any delays. Once all these are done, is when the loan can be passed.
10) Can I apply for a loan with a joint name?
Yes, a loan can be given along with a joint name (either with your spouse or any family members). It is a wise idea to apply for a loan with a joint name. However, one should remember that all the members have to submit the necessary documents to apply for a loan jointly. Also, anybody among the members can repay the loan if it is a joint name. In this way, you can avail for a loan of larger amount to meet your necessary expenses.
11) What do you infer by relationship discounts?
If you have already availed for loans and other services from a particular bank, then the bank offers discounts commonly known as relationship discounts. In other words, the lender from whom you have already been banking can offer you attractive discounts which can be in the form of less rate of interest or no processing fees.
12) How can my loan be repaid?
You can repay the loan in Equated Monthly Installments (EMI’s) through post-dated cheques (PDC) or by signing an ECS (Electronic clearing system) with your account. Mostly these ECS are submitted on the 1st day of every month, so it is advised to confirm the same with the bank. If you have an account with the bank then you can mandate the bank to directly debit the same.
13) What is an EMI?
EMI stands for Equated Monthly Installments. This installment comprises both principal and interest components
14) Can I prepay my loan?
Yes, you can certainly pay your unpaid loan in advance. However, you can prepay the loan only after paying the first 6 installments. Sometimes, various banks charge a small amount of penalty for paying in advance which can vary from 2%-5%. These charges were imposed on the loan amount which is remaining. Also, prepayment is not allowed by paying in installments or parts.
15) Do I need to open bank account with the bank for availing or servicing the bank loan?
No, opening an account with the bank you are availing the loan from is not mandatory. However, you can avail of special interest rates if you already have a relationship with the bank.
16) What are key benefits of personal loan?
- Loan up to 15 lacs: Most Banks give out loans ranging from Rs.50,000 to Rs.15,00,000 depending on your income and repayment capacity.
- No security/guarantor required
- Faster Processing: The loan depending on the bank and documents provided is sanctioned sometimes within 72 hours
- Minimum Documentation
- Attractive Interest Rates
- 12-60 Months repayment options through ECS (Electronic clearing Services), PDC’s (Post Dated Cheques), Account Debit
17) What do I need to know about personal loan?
- Eligibility Criteria
- No security/guarantor required
- Documents Required
- Interest rates and Charges Applicable
- Repayment options
18. What are the minimum and maximum loan amounts?
You can avail of personal loans ranging from Rs.75, 000 to Rs.15, 00,000, depending on your eligibility, income and repayment capacity.
19. What are the tenure options for a personal loan?
You can avail of personal loans ranging from Rs.75,000 to Rs.15,00,000, depending on your eligibility, income and repayment capacity.
20. How much time will it take for my loan to get approved?
Loans are approved within 72 hours of submission of complete documentation.
21. Do I have to provide any security, collateral or guarantors?
A personal loan is an unsecured loan. This means you don’t have to put up any collateral, as with a car loan or a home loan, where the underlying asset is mortgaged with the lender. You do not need a guarantor either. There are several other advantages as well, such as minimum documentation, fast processing. Furthermore, you can use this loan for any purpose you like.
22. Can I get personal loans for business purposes?
Yes, you can avail personal finance for business purposes.
23. What is the minimum credit score one needs to have for a personal loan?
Personal loans are granted by different banks on different criteria. But still most banks favour customers with a 700+ Credit Score.
24. Does Creditseva help us in closing our loans?
Yes, Creditseva will surely help you in closing your pending loans to maintain a healthy credit score. You can contact our decision maker there online anytime you face a hurdle.
25. Is my Data safe with Creditseva?
Creditseva is one of the most trusted financial sites and takes utmost care in the safety and security with the data of the customers. All data is sent in electronic form with high level of encryption