When can I opt for a Personal Loan?
Personal Loans can be used for a variety of reasons. A Personal Loan can be used for weddings, education, travel, medical or any other general purposes. You can take a Personal Loan when you need money to fund an event or an emergency.
What can I use a Personal Loan for?
A personal loan can be used for almost any type of expense ranging from big ticket appliance purchases and home renovations to luxury vacations and debt consolidation. Some other cases where personal loans may be useful include payment to unexpected medical bills, investment in business, fixing your car, down payment of new house and much more.
What are the mandatory documents required in applying for a Personal Loan?
The mandatory documents are:
- Bank Statements for the last three months
- Salary Slips for the last three months
- Address Proof and Identity Proof documents
What are the benefits of a Personal Loan?
Here’s why our Personal Loan is perfect for you:
- Quick loan payment
- No collateral or security needed
- Minimal documentation
- Flexible EMI plans and many repayment options
Am I eligible for Personal Loan?
You must have a regular source of income to avail a personal loan whether you are a salaried individual, self-employed business person or a professional. A person’s eligibility is also affected by the company he/she is employed with, his/her credit history his/her residential location and other factors as per the lender’s criteria.
What is the tenure of a Personal Loan?
Personal loans feature tenure of 1 year to 5 years or 12 to 60 months. In rare cases, shorter or longer personal loan tenures may be allowed by the borrower on a case by case basis.
What are the things that I should look for before applying for a Personal Loan?
A few things that you should consider when applying for a personal loan are as follows:
- Interest Rates: The interest rate charged for a personal loan can go from as low as 10% p.a. to as high as 24% p.a., based on the lender’s terms and conditions and your credit score. The interest rate makes a substantial difference to the cumulative cost of the loan.
- Repayment Flexibility: Make sure to check if the lender allows part-payments or pre-payments and if there is any penalty levied for making the payment.
- Processing Fee: Even if you are offered a low interest rate, a high processing fee could bump up the cost of your loan.
- Customer Service: Ensure that the lender has sufficient customer care channels for you to reach them on. Your loan provider should also answer your queries in a prompt manner.
Is pre-payment allowed for Personal Loans?
Certain lenders may allow you to pre-pay the loan amount, based on their respective terms and conditions. It is likely that you will be charged a pre-payment fee. Thus, if you intend to pre-pay your loan during the loan tenure, make sure to check if your lender allows this.
Can I foreclose or prepay my Personal Loan?
Yes, you can prepay the entire loan outstanding anytime during the loan tenure after 12 instalments, subject to payment of standard pre-closure charges of 2% + GST based on bank policy. No part prepayment is allowed. For prepayment of your Personal Loan, please visit the nearest branch. We request you to carry the following documents to complete the process:
- Request letter signed by the loan applicant
- PAN Card (if the mode of payment is cash and the amount is more than Rs 50,000)
- Payment can be made through cash, cheque or demand draft.
What is a Personal Loan Agreement?
Before approving the loan the lender shares a document with the borrower. This document outlines all the terms and conditions related to the personal loan including the amount of loan sanctioned, the interest rate being applied, repayment tenure, and more.
The applicant is required to read all the terms and conditions carefully and goes through any additional fine print. Signing on the dotted line implies that both parties, that is, the lender and the borrower are in agreement. This document is referred to as the personal loan agreement.
What is the turnaround time for deciding on a Personal Loan application?
Bank will convey its decision within 4 working days from the date of receipt of the application, provided the application is complete in all respects. The computation of 4 working days shall start from the day on which all documents required for a proper appraisal of the application are provided by the customer to the bank.
Why is it important to have a good Credit Score?
If you have a good credit score, the chances of you being offered the loan at a low interest rate are quite high. Your credit score indicates your creditworthiness and your repayment ability. If you are looking to apply for a personal loan, it is advisable to maintain a credit score that is over 750. Individuals with a very low credit score may be denied a loan altogether, while those with a moderate credit score may be offered a personal loan, but at a high interest rate.
Pre-Closure vs. Part Payment
Pre closure means that a customer wants to close the entire principal outstanding amount at one go. Whereas part payment means that a customer wants to repay only a certain portion of the outstanding amount. Please ask our advisor for more details on this when you loan is being processed.
What happens if I miss an EMI?
The bank will levy certain ECS bounce charges/penalties. In addition it will get reported in your credit report. Depending on the severity of the default it can have serious impact on your future credit possibilities like a home loan, car loan etc. In addition, the banks can also take legal action against the borrower.
Does CIBIL play a role in Loan approval?
Certainly as it is a measure of your financial status and your loan histories. Maintaining a healthy CIBIL score would ultimately help your application and also the amount of loan you get and also the duration.
What is an EMI?
Equated Monthly Instalments (EMIs) give you the ease and benefit of paying back the personal loan amount in smaller convenient instalments. The instalments consist of both the principal and interest amounts.