Apply for Personal Loan in India
Personal Loan: Overview
Personal loans are unsecured loans provided by the banks without taking any collateral security, though some PSU banks may insist on a guarantor. Personal loan can be taken for any personal requirement ranging from marriage to holidaying or maybe to buy a lifestyle product or medical emergencies. The end purpose is not important to the bank as long as it is not for speculative trading.
Personal loan is a simple hassle free process of acquiring personal finance with minimal documentation and within quick time. The bank will require the borrower's documents regarding the proof of identity, residence along with income proof / ITR of last 2 years to initiate the process for loan sanction.
After verifying the documents and checking the borrower's credit score with Credit Information Bureau (India) Limited commonly known as CIBIL, the bank may decide whether to approve or reject the personal loan.
The personal loan amount and rate of interest is dependent on three major factors. First are borrower's income and his ability to service the loan. Second is the company for which the borrower is working and third is the credit history of the borrower. The bank may reject the personal loan if the borrower has defaulted in his past dues on any credit card or loans.
Once the borrower is qualified for the personal loan it takes close to about three days or so to get the loan amount disburse. The personal loan repayment is in equated monthly installments and tenure can vary from 1- 5 years.
It is advisable for a borrower to get in touch with as many banks as possible and get them to make loan offers to him. Then he can then try to negotiate with them and select the most cost effective option for him. The borrower will also have to take into consideration the processing fee and prepayment charges while finalizing the lender.
Always remember that personal loan should be taken in dire emergency as far as possible. Being classified as unsecured loans, these loans are usually more expensive in terms of interest rate compare to any other loan taken against collateral security like gold jewelry, high surrender value insurance policies, etc.
Personal Loan Compare
Personal Loan: Compare Quote
Made up your mind to go ahead with pursuing your dream of fulfilling the long cherished desire? You can do that by opting for personal loan, though tricky in nature as it is not easy to make out whether this is a necessity or just an indulgence. This is your call but our Compare Quote on Personal loan can certainly help you by giving complete spectrum of interest rates offered by various banks across the country.
Personal Loan Interest Rates
Current Personal Loan Interest Rates in India
Personal Loan is a very convenient mode of arranging finance for short-term without providing any security. The avenue of personal loans can be used for the purpose of meeting various needs like education, vacation, marriage, medical expenses, furnishing of home or any unexpected financial urgency.
personal loan interest Rates are primarily dependent on the profile of the borrower and his past repayment track record. The profile of the employer where the borrower is working also has a huge bearing on the personal loan interest rate. Being an unsecured loan, the lender is taking a big risk in lending you money and to cover that risk, the lender charges you a higher rate of interest than those charged on any other secured loans.
Due to higher risk Usually personal loan interest rates are higher than the interest rates offered on loan taken against collateral securities like gold, life insurance policy with surrender value, NSC and KVP etc. It is always advisable to get in touch with as many lenders as possible and get them to make loan offers to you. This will help you in negotiating on the processing charges and the rate of interest as well.
Do not get fooled by the personal loan rate conveyed to you by the lender. Some lenders calculate personal loan interest rate on monthly reducing basis and some on annual basis. It is always advisable to opt for monthly reducing basis, because when a portion of principal amount is paid, the next month interest will be calculated on balance principal outstanding for the subsequent month whereas it is done once a year in case of annual basis. So effectively you pay interest on the principal, which you have paid during the year.
Beware of floating type of interest rates, because if the Base Rate / PLR rise, your rate of interest will also rise with it.
Last but not the least; it is advisable not to go for personal loan unless you are in dire need of money. In case you are able to provide any security, please offer to pledge that so that you will be able to get the loans at the lower rate of interest than what is applicable in case of personal loans.
Personal Loan Eligibility Criteria
Personal Loan: Eligibility Criteria: Overview
You are eligible for a personal loan if you are a salaried individual, self-employed individual (own business), or a self-employed professional (doctor, lawyer, etc.). Other factors such as your income, age, residence, work experience, repayment capacity, past obligations and place of work are also taken into account. A personal loan can be used for any purpose provided it is legitimate; you need not mention the end use to the lender.
Compare various personal loan providers and decide for yourself the best option.
Personal Loan EMI
A Personal Loan is a great way to get money quickly whatever be the purpose of funds. You can borrow a fixed amount and re-pay in equated monthly installments (EMI).
A personal loan emi is the amount payable each month from your future income towards repayment of your loan. Try our Personal Loan EMI Calculator to find out exactly how your Personal Loan EMI gets computed. The EMI is primarily dependent on several factors - more prominently like the interest rate of borrowing and the period of loan, etc. It is these factors which contribute to the difference in EMIs charged by the various banks like SBI, HDFC, ICICI, etc.
Paying your loan EMI on time helps you build a re-payment track record. Most banks lend at a lower rate to customers with such a track record. So if you want better-than-market rates (and therefore lower EMIs) the next time you seek a loan, be sure to pay your EMI on time.
If you do not like the idea of paying a fixed loan EMI each month, you may want to consider is an overdraft facility. Unlike in a Personal Loan, here there is no fixed EMI to be paid back every month. You get flexibility in your repayment schedule. The interest charged each month is typically based on the fluctuating daily outstanding balance. There may also be a service fee that a bank may charge for managing the credit line. Also, you may have to offer a security.
Personal Loan Apply
When applying for a Personal Loan
A Personal Loan is often the most convenient way to raise money whatever be the purpose of using money. Before you apply, you may want to keep in mind the following 4 factors
1) Check if you can provide any security
A loan secured against your jewellery or against securities such as Mutual Fund units, listed shares of major companies, debentures of major companies/public sector companies, life insurance policies with large surrender values, National savings certificates, etc. can often be quicker and cheaper.
2) Get your own credit report
Apply online at http://www.cibil.com/accesscredit.htm and follow the instruction given there to get a copy of your own credit report. Check your credit report thoroughly to spot errors. If need be, use our advisory services on CIBIL Report to get any errors corrected. Remember any errors in your credit report can reduce your chances of getting a good personal loan offer.
3) Go for Fixed rates of interest
Most personal loans are available at completely fixed rates of interest for the entire tenure. Make sure that the personal loan that you are taking is also fixed for the entire tenure of the loan.
4) Be aware about the Processing fees and Pre-payment Charges
Most personal loans have processing fees ranging from 0.50% to 3% of the loan amount . Most personal loans will also charge you a fee if you wish to pre-pay the loan of between 3-5% of the loan amount repaid. Some lenders will not allow pre-payment for the first 6 months and most lenders do not accept partial pre-payment.
Do not sign blank application forms or documents and keep a copy of all documents submitted to the lender for your future reference. Any promise made by the DSA or even an official of the lender has no value unless it is in writing or at least on email.
So if you are basing your decision on any such promise make sure you get it in record in some form.