PERSONAL LOAN BASICS :WHAT IS A PERSONAL LOAN?


PERSONAL LOAN BASICS :WHAT IS A PERSONAL LOAN?
PERSONAL LOAN BASICS :WHAT IS A PERSONAL LOAN?

Table of Contents

* What is a personal loan ?
* Eligibility criteria .
* How much can a loan take ?
* Other issues .
  • WHAT IS A PERSONAL LOAN?
Simply put, the personal loan facility is an unsecured loan, which the individual or the NBFC uses to meet their personal needs.

 It is provided on the basis of major criteria such as income level, loan and employment history, repayment capacity etc.

Unlike a home or a car loan, a personal loan against any property is not secure.

As it is unsafe and the borrower does not mortgage any financial property, due to this, the lender, in case of default, any of your property, can not do any auction and you are not even subject to it.

 Interest rates on personal loans are higher in comparison to home, car or gold loans because they are at higher risk when sanctioning them.

However, like any other loan, lending on personal loans is not good because it will reflect in your credit report and will cause a problem if you apply for a credit card or other loan in the future.

It can be used for any personal financial need and the bank will not monitor its use.

 It can be used for your home, marriage-related expenses, a family holiday, education for your child, purchase of latest electronic equipment or home appliances, unexpected medical expenses etc. or in any other emergency.
ELIGIBILITY CRITERIA
Do you have a personal loan? The eligibility criteria for this vary from the bank to the bank; the general criteria include your age, occupation, income, ability to repay the loan and residence.

To take advantage of personal debt, you should have a regular income source, whether you are a salaried person, self employed business person or a professional.

 A person's eligibility is also influenced by the company he employs with his credit history.
HOW MUCH CAN A LOAN TAKE?
It usually depends on your income and is based on whether you are salaried or self-employed. Generally, banks limit the loan amount as if your EMI is not more than 40-50% of your monthly income.

When calculating the individual loan amount, any existing loan served by the applicant is also considered.

For self-employed, the value of the loan is determined on the basis of the profit earned according to the most recently accepted profit / loss statement, while keeping in view any additional liabilities (like current loans for business, etc.) .
OTHER ISSUE:
  1. Minimum loan amount:                                                                                                           Although the exact amount varies from one institution to another, most lenders have fixed their minimum personal loan default amount of Rs 30,000.                                                                         
  2. Interest Rate:                                                                                                                                   Due to unsecured loans, personal loans have a higher interest rate than secure 'home and car' loans.                                                                                                                                                                                                                                                                                                          At present, many leading banks and NBFCs offer such loans at 12% interest rates.               However,                                                                                                                                          the rate applicable to the borrower depends on key factors, including credit score, income level, loan amount and tenure, past relationship with the lender (savings account, loan or credit card).                                                                                                                                                                                                                                                                                                        The interest rate of most personal loans is 14-18% and rates are only available to select customers.                                                                                                                                             
  3. Additional charges:                                                                                                                            In addition to the interest payable on the original amount, there is a non-refundable fee when applying for personal loan.                                                                                                                                                                                                                                                              The lender charges the processing fee, usually at 1-2% of the loan amount, for fixed amount such as 1000-2000 for a small amount. The lender can forgive this fee if you have long been associated with it.

To take a personal loan you have to go to the financial institutions mentioned above and have to present necessary documents such as base, income proof and pen card, after calculating all the borrower, you can get the maximum loan and amount interest rate.

thanks for the time .  

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