Have been thinking of refurnishing your house? Want a holiday abroad? Yearning to buy a new Laptop? Need of urgent medical treatment? Daughter's marriage coming up? Child's admission to a professional college? A personal loan will meet your urgent need for cash.
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 either. Once you submit your application form and supporting documents, banks give approval within 72 hours to a maximum of seven days, provided 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.
Personal Loans can be used for anything and everything. There are no restrictions on the end use. You could use the loan money to finance anything from 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.
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. You should also check with the bank you have your salary account in for special discounts to existing customers. You can negotiate the rate with your bank. Also find out the eligibility criteria and the documents required before you apply.
Loan eligibility differs from bank to bank. The main factor the bank considers is your ability to repay the loan. Your profile in terms of residence and the place you work is also taken into consideration. Do make sure to check all such other eligibilities before applying.
Personal loan is a short tenure loan. Most of the banks provide you loan for a minimum of one year to a maximum of five years.
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 and the bank would like that the installments you pay should not exceed more than 30 to 40% of your net salary or 2-3 times of your income tax return.
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. The other charge is the prepayment penalty which varies from 2%-5 % paid at the time of preclosure (returning the money before the stipulated tenure of the loan) .This is because the banks primarily earn from the interest rate they charge you. Similar to processing charges, you can also try to get this fees reduced.
The interest rate varies from bank to bank. And usually it varies from 14%-26% depending upon your profile, kind of job and place of work, residence and city you live in. The most important factor is your repayment capacity.
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 recommended that you keep all your documents ready and in order to avoid any delays. The loan is disbursed only after the completion of submitting of all required documents.
Yes. It's always a good idea to apply jointly with a co-applicant (either be your spouse or your parents) for a personal loan. This helps you to increase your income eligibility and you can also avail for a larger amount of loan, if you want to, as your co-applicants income also gets added to your income and that total is taken into consideration for calculating the loan amount you will be eligible for.
Banks offer relationship discounts if you already have a relation with that bank. This can either be by having your salary account or another loan like an Auto loan from the bank. This basically means that if you are already banking with the lender from whom you seek to avail a loan, they give you certain discounts in the form of reduction in interest rates or other such charges, sometimes even giving you additional services like fast processing and fewer documents.
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 the account that you hold .Mostly these cheques/ECS are presented on 1st of each month ,so please do confirm with the bank on that respect. If you have an account with the bank then you can mandate the bank to directly debit the same.
EMI stands for Equated Monthly Installments. This installment comprises both principal and interest components. Please use the EMI Calculator to find out the EMI you need to repay.
Yes, you can prepay the entire loan outstanding after paying 6 installments of availing the same. The Bank charges a prepayment penalty which varies from 2%-5 % paid at the time of preclosure (returning the money before the stipulated tenure of the loan). Prepayment charges as applicable would be levied on the outstanding loan amount. No part prepayment is allowed.
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.
LAP - Loans against Property, loans against shares or gold are a more sensible option in comparison to an unsecured personal loan if one needs to pay back the bank over a longer time frame. The loan amount one is eligible for is dependent on the value of the property and the interest rates are much lower.
It gives the loan taker ample time to repay the loan but the catch is failure to do so will result in the property being auctioned to secure repayment by the bank/financial institution.
On the other hand, the advantage of a personal loan is that it requires minimum documentation and is quicker to process
- 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
- Eligibility Criteria
- No security/guarantor required
- Documents Required
- Interest rates and Charges Applicable
- Repayment options
• Better Interest rate: Getting a personal loan is cheaper than borrowing on your credit card. So, if you have run up a huge outstanding amount on your credit card and the accumulated interest is making it almost impossible to clear your outstanding, a personal loan might be the way to go. What you do here is use money borrowed at a lower interest rate (the personal loan) to pay off money borrowed at a higher rate (outstanding amount on the credit card).
• Credit score, credit card outstanding
• Interest rates on personal loans vary wildly from bank to bank and are based primarily on the customer profile. For instance, an employee of a multinational company may get a personal loan at 12%, while a self-employed person gets it at 24%. You should ensure that you get the best deal for your profile.
• Read the fine print. Look out for foreclosure charges, service charges, and any other hidden charges. Prepayment fee or foreclosure charges on a personal loan can be as high as 5%.
• Scrutinize offerings carefully and always compare rates offered by other banks. Existing Account holder: Banks offer special rates to existing customers (having a salary account or existing Auto loan etc) Watch out for special rates with your own bank. Some banks offer a hassle free personal loan (without income documentation) to existing customers.
• Some banks offer Credit shield options :In case of death or total permanent disability of the loanee,the loanee/nominee can avail of the Payment Protection Insurance (Credit Shield) which insures the principle outstandings on the loan upto a maximum of the loan amount.Principle outstanding is defined as the amount of loan outstanding (not including any arrears in payment or interest thereon) at the Date of Loss,having accounted for payments made and interest accruing as determined in the Policy. Hence,the amount covered does not include any principal added because of non - payment of EMI and also will not include interest/ accrued charges.
• Transfer of an existing personal loan from one bank to other another bank to at attractive interest rates. So look out for such deals.
• Personal Accident Cover: Some banks offer an insurance for which the premium is deducted along with the loan amount. You might think it's for free but there will also be a service charge along with the premium that will be charged to you.
