What is a personal loan?
A personal loan is money borrowed from Banks or Non-banking financial companies (NBFC) by an individual to fulfil their personal needs. It is provided on the basis of income, credit history, repayment capacity etc. Every year Thousands of people take personal loans to meet their necessities like consolidate debts, meeting unpredictable expenses or any other emergencies.
Most personal loans are “unsecured” – means they don’t need any collateral security, and this is because it charges a higher rate of interest rate than other secured loans like a car or home loan as it includes greater perceived risks while sanctioning them.
The biggest advantage of personal loan is you can use that money in any way as you wish it has the simple eligibility criteria that it entails-all you need is a good credit score and be ready with paperwork.
3 things you should know before taking personal loan
Interest rate
Interest rate is a fee that you have been charged against the money that you have borrowed from banks or non-banking financial institutions (NBFC). The interest rate is fixed in the entire loan period so the interest can affect the amount of monthly instalment substantially. So, spending some time and finding the best rate of interest will save you a lot of money.
Repayment period
This is the period in which you need to pay back the amount that you have borrowed with the interest amount. Keep in mind that the shorter time it takes to pay back your loan, the lower interest will accrue; However, it means a bigger EMI. So, look at the tenure offered by different lenders and go for the best option which gives you the right mix of tenure and EMI.
Prepayment/foreclosure charges
When you pay off your loan before it becomes due as per EMI Schedule. However, the lender might charge a big penalty for an early disclosure. Therefore, you should check the charges applicable on prepayment before applying for a personal loans online.
FAQs
How to Qualify for personal loan?
- Salaried employees working in
- Government employees
- Private or Public companies
- MNCs
- Self-employed professionals like Doctors, CA, CS, Architects etc.
- Age limit for applying of personal loan is 21 years to 60 Years
- Minimum monthly net income of an individual should be 15000.
- KYC details
- Employees Id cards
- Minimum work experience of 12 months
- CIBIL score should be of 750+
How to check if you are eligible for a personal loan or not?
If you want to apply for a personal loan, you will need to determine your eligibility. To do that, you can use the personal loan eligibility calculator. For this you need to open the loan eligibility calculator, select the city of residence, date of birth, monthly income and monthly expenses, then the tool will figure out the eligible amount. As per the qualifying amount limit you can apply for the same and can get instant approval of loan.
Which Financial institution or bank is good for personal loan?
There are many financial institutions and banks which provide instant personal loans within 1-2 days. The interest rates of these financial institutions range in between 10% to 20%. You can compare and choose the best loan provider according to your requirement.
Is there any minimum and maximum amount of personal loan?
Yes, minimum and maximum amount of loan has been fixed by the banks or financial institutions for personal loan which mostly falls between 25000 to 25 Lac.
From where you can take a personal loan?
Top banks and NBFCs such as Bank of Baroda, State bank of India, Kotak Bank, Tata Capital, etc offer personal loans with attractive interest rates and flexible loan tenure. You can visit aggregate sites and compare to get the best match as per your loan eligibility and requirements.
