Personal Loan Can Be Saviour in Times of Financial Needs, Here’s How
Life is full of surprises and sometimes even unpredictable. Everyone can plan for the certainties well in advance, but what you cannot prepare yourself for are called uncertainties and they can come at any time. Every moment of one’s life is a challenge and the one who accepts and completes that challenge becomes a self-proclaimed winner. Financial urgency and monetary emergencies are the most common and familiar situations that can put your financial health in jeopardy.
To overcome these difficult situations like lack of money or money shortfall, personal loan can be saviour to meet your financial needs. A personal loan is termed as short- to medium-term unsecured loan that can be used to meet any of your financial requirements. Personal loan can be used for various reasons, such as medical expenses, home renovations, weddings, higher education, holiday trips, buying machinery or expensive tools for business purposes, debt consolidation, etc.
Personal loan acts as a most viable option to ease-up cash flow during tough times. Personal loans can be opted for several reasons, such as minimal documentation, fast processing and the flexibility to use loan as per the individual requirement. Nowadays, India’s leading banks and NBFCs (Non-Banking Financial Companies) are offering personal loans to both salaried and self-employed individuals.
If in case, you possess and maintain a TransUnion CIBIL score of 750 or above then your chances of availing a personal loan are much higher. High credit score above the said limit indicates that you have a good financial history and are able to repay the loan without defaulting. Also, you can negotiate benefits, such as a lower interest rate, higher loan amount or low processing charges, etc.
Features and Benefits:
No Collateral Required
It is an unsecured loan which means a loan offered without keeping any assets, such as house or car as a collateral. Unsecured personal loans are offered based on the applicant’s credit history. If you have not defaulted on payments of an earlier loan and have paid all your credit card bills on time, you will be viewed as a low-risk borrower.
Lower Interest Rates
Interest rates for personal loan are allocated according to the customer’s salary, borrowed amount, loan tenure and other criteria that differs from one lender to the other. Personal loan interest rates are different for different lenders. It is basically decided on the basis of your employment type i.e. salaried or self-employed, monthly income, CIBIL score and existing EMIs, etc. It is an unsecured loan, thus the short tenure of loan also plays a role in deciding the interest rate.
Personal loan can be availed for time duration as per your requirement. The repayment period is fixed and ranges from 1 to 5 years. Generally, personal loans with longer duration are offered at higher interest rates and vice versa.
A personal loan requires minimum paper work and is often approved within 2-3 days after submitting an application. Once approved, you may either receive an account payee cheque/draft equal to the loan amount or get the money deposited automatically into your savings account.
If you use the personal loan for your home renovation or making down payment for your house, you can avail the tax deduction of up to Rs 2 lakh under Section 24B for the interest part in a financial year. Also, you will have to submit enough documents to prove that the money provided has been utilised for that purpose only.
Building Credit History
Avail personal loan and repay it timely to build a good credit history to further increase you credit score.
In addition to a processing fee, other charges levied on a personal loan includes pre-payment fee, late payment penalties, and documentation charges.
Salaried and self-employed individuals or business professionals are eligible for a personal loan. Being an unsecured loan, no collateral is involved in approval. Therefore, kindly consider its eligibility criteria as mentioned:
- Income: Applicants should have the lender specified monthly repaying capacity or minimum salary.
- Age: Applicant must qualify for the applicant age bracket defined by the lending institution.
- Credit Rating: Applicant should have the bank specified credit score and suitable credit history.
- Existing EMIs: Applicant should not have any other loan liabilities or must have strong ability to take additional debts.
- Repayment ability: Applicant should have been employed by your current organisation or been involved in your business for a certain number of years.
Top 10 Banks offering Personal Loans:
- HDFC Bank
- State Bank of India
- Axis Bank
- ICICI Bank
- Kotak Mahindra Bank
- Bank of Baroda
- Punjab National Bank
- HSBC Bank
- Standard Chartered Bank
Personal Loan Interest Rates:
|Interest Rate||10.99% onwards|
|Processing Fees||Upto 3% – Differs From Bank to Bank|
|Loan Tenure||Up to 5 Years|
|Pre-closure Charges||Differ From Bank to Bank|
How to Calculate EMI on Personal Loans?
Before applying for a personal loan, it is recommended to plan a budget as there will be an additional EMI (Equated Monthly Instalment) amount that you have to repay in time. It assists you to ensure that your monthly budget is not stretched and you minimise the chances of default. You can check your EMIs by simply visiting Paisabazaar.com. You just need to enter loan related information, such as loan amount, interest rate and loan tenure in its Personal Loan EMI calculator to get the EMI amount based on your submitted details.
Points to Remember Before Applying:
- Plan your expenditure and abide by the same.
- Check your credit score.
- Correctly choose the repayment period.
- Choose at least three available options.
- Perform detailed market survey and do a comparison check.
- Check early payment charges.
- For pre-payment feature go with zero processing fee, if available.
- Lower interest is not always beneficial.
- Read terms and conditions carefully.
Why choose Paisabazaar.com?
At Paisabazaar.com, you are provided convenience to compare and finalize from all the available personal loan options offered by several banks. Our portal allows you to review and compare personal loans of different types based on key criteria specified by you. Find the loan that meets all your terms and conditions and apply for it on the same website.
For personal loan-related queries, call at 1800-208-8877 or visit Paisabazaar.com