Personal loan will help you manage your expenses on many things like renovating homes, financing cars, debt management or even on financing a new car. And don’t forget the unexpected medical expenses that might pile up in the nearest future.
Can I avail a personal loan?
Well if you satisfy the eligibility criterion of the personal loan, then you can definitely avail it. All you need is to have a regular stream of income and a good credit history and you’re set for good. Personal loan doesn’t have a long list of eligibility criteria and can be met easily upon.
What are the eligibility documents to be submitted at the time of application?
The documentation process requires furnishing off these following documents
Certified copy of Professional Degree in case of self-employed
What are the major pros of personal loan?
Personal loan is often the major source of cash influx for many in need and is pretty much straightforward. Here are the pros associated with personal loan-
Quick processing-The whole documentation procedure requires little time and can be processed really quick in 1-2 days’ time. And whoosh, you’ll have the money in your hand or account.
Minimal requirements-Personal loan doesn’t require a host of requirements as seen in other loans like business loans, commercial vehicle loans and more. It has pretty minimum requirements.
No need of collateral or security-Personal loan is unsecured and doesn’t require any collateral for submission. Just a fine credit score and history will work for you.
Flexible-Personal loan offers a flexibility in usage of funds and doesn’t reserve any cap limit on it.
Are there any cons of personal loan?
Well, there are a few of the cons, though. Here’s what they are-
Pretty high-interest rates-Adhering to the quick processing and no collateral agreement, personal loans have high-interest rates than the secured ones.
Varying Qualification criterion-The eligibility criteria is mandated on the basis of good credit history and can only be availed on the basis of the same.
What is the process behind the application of loan?
The application of loan is followed by the discretion of loan sanctioning officer who decides whether the applicant has furnished the rightful documents that match the bank’s criteria. The loan then gets processed towards verification stage whereby the loan gets sanctioned thereupon. The entire process takes anywhere from 48 hrs. to 2 weeks.
How long would personal loan last?
Personal loan comes in with plans from 1 year to 5 years and can be decided upon by the applicant along with the lending company. However, there are exceptions and rarities where a person can seek shorter or longer tenure of personal loan depending upon the case.
What are the extra charges associated with the application for personal loan?
Personal loan comes with an additional non-refundable charge that is to be paid at the time of the application of loan. Furthermore, the processing fees also come in at around 1%-2% of the loan amount. The processing charge might as well be waived off as seen in certain cases. However, as things stand, both of these charges are associated with the application of personal loan.
Is the interest rate for the personal loan on fixed or floating basis?
The personal loan differs as per the scheme and can be based either upon the fixed rate or the floating rate. Nevertheless, these are pre-mentioned during the application procedure to the loan seeker. The fixed rate shall mean that your EMI is same at every month while floating basis shall mean that the EMI amount is on a decreasing order adherent to the reducing balance method.
Is there anything to differentiate in between flat interest and reducing interest?
Flat interest rate shall mean that the borrower is charged interest on the entire loan balance with the same EMI to carry for the remaining period of the loan tenure. However, in reducing interest method, the interest to be charged shall be calculated only on the outstanding amount of loan and will be lesser as the period goes by.
What is the mode of disbursement for personal loan?
Personal loan is either disbursed via an account payee cheque or a draft. You can also seek the loan amount directly into your account via the electronic transfer method.
What are the means for the payment of personal loan and its EMI?
The loan amount can be paid via EMI amounts in through cheque. The cheque should be post-dated and should be drawn in the favor of the lending bank.
What will be the pre-payment penalty for the personal loan?
Personal loan comes with a tenure during which the loan needs to be paid. In cases where the person availing the loan wants to pay it off before the expiry of the tenure, then an additional pre-payment penalty shall be charged on. The penalty generally ranged around 1% to 2% of the remaining principal amount.
What will happen if I ever default on my EMI payment schedule?
If there arises a situation where you default on your EMI payment and become unable to make future payments, then the lender shall seek the attempted recovery via settlements and more. Your credit history will be severely affected with the loan reported as default on payment. That in itself is a grave mistake to make as your future applications shall be affected due to it.
Will my CIBIL Score and Credit history affect my prospect of a successful application?
Credit history and CIBIL Score has a great role in landing you a preferred personal loan. The criterion for personal loan is based on your previous credit history and your current monthly income. As such, CIBIL Score and Credit history will prove to be the differential in ensuring the lesser interest rates.
How does a Bank or Finance Company calculate the maximum EMI Amount?
As of the norm, the maximum EMI amount is calculated on the basis of the affordability tag of the applicant. Generally, the banks or finance company charges the EMI at around 30% to 40% of the take home salary. However, in cases of existing loan, the personal loan based EMI will be capsized accordingly.
Should I opt for personal loan or car loan to buy a car for commercial use?
You can choose between any of personal loan or commercial vehicle loan. However, judging by the offerings from the banks and more, commercial vehicle loan is comparatively lesser and cheaper option than the personal loan. But, commercial vehicle loan often requires specific eligibility criterion which needs to be fulfilled. If you can’t fulfill that criterion, then the personal loan should be your option.
Is there any personal loan for pensioner if I happen to have a pension account in a leading financial institution?
Multiple of banks, both private and public offer personal loan to pensioners on the behalf of pension account. You can avail personal loan of amount up to 10 to 20 times from your monthly pension or as accordingly under the bank’s rules.
What is the minimum personal loan that I can avail?
The minimum stipulated amount that can be availed as a personal loan varies from one lending bank to another. However, as of the norm, many lenders have set the mark at Rs 30,000 at present.