Personal Loan is taken to meet personal expenses of any form. The interest rate on the loan and the loan amount that gets approved varies from individual to individual. Various factors like, employment history, cibil score, income among others is taken as an input to decide the loan eligibility for an Individual.
The personal loan application does not require any form of collateral or guarantor while the eligibility criteria differs for Salaried and for Self Employed Individuals. Personal loan can be applied online and with quick disbursement options it will help you meet any unexpected expenses.
Personal Loan Interest Rate, Loan Amount & Key Features
Interest Rate for Personal Loan
The interest rate on personal loan for salaried individuals depends on the credit history of the borrower, the organization for which the borrower is working, loan amount required, income among other factors.
Interest rate may vary from 10.75%* to 18%
Approved Loan Amount for Personal Loan
The sanctioned loan amount depends on income, existing fixed monthly expenses and EMI among others.
Personal loan from Rs. 50,000 to Rs 30 Lac can be applied
Other Key Features of Personal Loan
- Most lenders offer flexible loan repayment option from 12 months to 60 months
- Online Portals allow you to check eligibility instantly
- Quick disbursement ranging from 4 hours to 3 working days after approval
- Existing high interest loan can be transferred to low interest Personal loan with another Bank or NBFC
Purpose of Personal Loan – Should you apply for a Personal Loan?
With people getting more aspiration and loan disbursement process getting simplified there is no need to postpone your dreams. Personal Loan can be applied for any purpose. Below are the most common reasons for people to opt for a Personal loan.
- Meet Medical expenses
- Pay for an exotic Vacation
- Renovate their house or to buy new furniture
- Invest in higher education
Personal Loan Fees and Charges:
Processing fees varies from lender to lender and will be in the range of 0.5% to 3% (excl. service tax) of loan amount. Generally the processing fee for personal loan is not taken upfront, but is deducted from the loan amount disbursed by the lender.
If the personal loan is availed on floating rate of interest the borrower need not pay penalty for early closure of loan but may end up paying penalty if the loan is on fixed rate of interest.
Personal Loan Benefits
A Personal loan brings a lot of benefits as mentioned below
Quick Disbursal: You can get quick disbursal usually within 1-2 days with a lot of banks such as Citibank , HDFC Bank, ICICI Bank, Tata Capital, IIFL and other bank and NBFCs. If you hold an account in any of these banks, you can get a pre-approved personal loan quicker
No Specific Purpose: Unlike a Home or Car loan, Personal loan can be applied for any purpose be it for a vacation, wedding, higher education etc.
No Collateral or Security needed: Personal loans are issued based on income and creditworthiness among a few other parameters. Any form of collateral such as a home is not required to get a personal loan.
Easy documentation: Personal loan application does not require complex documentation. For salaried individuals, ID proof, Income proof, address proof is all that is needed. Self employed individuals would additionally require business proof to apply for a personal loan.
Flexibile Loan Tenure : With a Personal loan, you can apply for a tenure from 6 months to 84 months taking into consideration the overall interest rate and monthly EMI.
How to Get a Personal with an Average Income
Having a low pay has numerous disadvantages, for example, an individual needs to battle to satisfy everyday needs and in the meantime set aside some cash to meet money related objectives. Be that as it may, there might emerge circumstances in life when there is a critical requirement for money. It very well may be for anything, for example, marriage, restorative crisis and so forth. Even though you will swing to your relatives or companions to loan cash, still everybody has their restrictions. What’s more, you may not get support inevitably. In such circumstances, the Personal loan acts the hero. Nonetheless, there are many credit alternatives explicit to borrowers on low pay.
Loans for Low Income Person:
Loans for low salary borrowers incorporate transient loans, individual loans (with little sums), Centrelink loans and the sky is the limit from there. What’s more, there are numerous banks, going from conventional budgetary establishments to elective back moneylenders, that offer a large group of low salary loan choices. Even though these choices may offer littler loan sums, they usually have to bring down charges and financing costs than conventional loans.
Albeit a few loan specialists have a base pay necessity, different moneylenders don’t. If a specific loan specialist has least pay prerequisites, you can discover this sum on the finder.com.au survey page for that particular moneylender. On the off chance that a moneylender sets no base salary prerequisite, take a gander at other necessities to ensure you meet them.
Likewise, since pay is a standout amongst the essential factors bank investigations, you can get a quick thought of the amount you’re ready to obtain through finder.com.au’s Acquiring Force Adding machine. Here, you’re prepared to check obtaining limit dependent on the sources and measure of salary you’re getting.
Three best ways to get a personal loan is:
Apply at banks offering personal loans to low pay workers:
Few out of every odd bank has a condition to provide credit just for high salary people. There are numerous banks, for example, SBI offering individual loan to low pay workers for a month to month pay as little as Rs. 7,500, Canara bank and HDFC bank – Rs. 10, 000. Scarcely any banks additionally offer loan which is half of the gross pay.
Personal loan against LIC Arrangement:
Each must have at least one LIC arrangement. Not very many individuals know that loans can be benefited against your LIC approach. There are numerous advantages of taking an individual credit against LIC arrangement, and the most appealing position is that the premium charged is less contrasted with when the loan is made from the bank, and there is no standard of paying settled EMIs for reimbursement. Different favorable circumstances are financial assessment isn’t checked by the backup plan, archives required are insignificant and numerous others.
Personal loan against Credit cards
This is a pre-endorsed offer for qualified cardholders and is a snappy method to defeat crisis cash require. Qualification is chosen primarily based on your FICO assessment. Loan sum is subject to the credit furthest reaches of the card and is higher than the money withdrawal limit. Banks will give you cash either as interest draft or right move into your financial balance.
10 Best Reasons to Apply for a Personal Loan
There are numerous reasons why one should apply for a personal loan. In addition, it provides a lot of advantages while dealing with finances. It offers financial freedom and helps in repaying credit cards, combine and manage the extra debts, and more. So, no matter the financial situation, a personal loan has the capability to help in an emergency condition. What more? Most of the personal loans do not require any collateral input as well.
So, have a look at some of the reasons to apply for a personal loan and understand its advantages as well.
Are there are too many bills to be paid? Too many credit bills, as well? Personal loans come in handy in these situations. It is indeed the quickest way to stabilize the financial needs and get rid of debts.
Settle credit history
Personal loans help in repaying credit cards with a much less interest rate. The overall time of repayment is also reduced and the debt can be paid off in time. This improves credit history as well.
Boost up any new business
Everyone wants to start their own business and the only thing acting as an obstacle is the absence of funds. Personal loan, especially a business loan helps in providing required funds for starting a business.
Effectively finance a home renovation
Considering home remodeling? Willing to renovate your kitchen, or install a pool, or remodel the roof? A personal loan is undoubtedly an efficient solution to these needs. It proves beneficial for those who don’t want to get involved in equity loans.
Meet up medical expenses
Life is quite uncertain and emergencies are bound to arise. In such situations, the lack of funds shouldn’t be a matter of worry. Personal loans will provide funds within a matter of hours and meet up the medical expenses.
Fulfill the dream of higher education
Wishing to go abroad for higher studies? Worried about the financial requirements of the institutions? Personal loans are effective in such situation by not only covering study expenses but also extra expenditures in specific cases.
Purchase that dream car
A personal loan will help in buying a car, or a stylish bike, or some expensive vehicle. A motorcycle, or a horse, or a big cruise, or an elegant boat can be bought anytime with a personal loan that can be repaid later.
Have that long cherished vacation
Planning to go for a family vacation or a friendly gathering? Constant job schedule is quite hectic. In such situations, a personal loan can come in handy.
Own some cool gadgets
Eyeing a particular gadget that is going to be released in a few months? Tired of asking relatives and parents? Get a personal loan to buy that cool gadget and repay it at regular intervals.
Have that dream wedding
Got that right girl for you and want to marry her in a lavish way? A personal loan can prove beneficial in fulfilling that dream wedding.
While there are many reasons to get a personal loan, repaying them timely is the main priority. Be it for credit cards, or wedding expenses, or study expenses, or other personal loan is a better solution.