A personal loan is one for which you do not need to offer any collateral or security to the bank. A personal loan can be applied for online, in person at a branch, or through non-bank financial institutions (NBFCs). Personal loans include attractive interest rates and a wide range of repayment alternatives. You can avail personal loans for a variety of purposes, including wedding expenses, vacation expenses, and home renovation projects. These are the perfect alternatives for your immediate needs. You can get easy personal loans by several lenders and they are easily accessible. The borrower can apply for personal loans both online and offline at your convenience. You can obtain personal loans at affordable interest rates if you have a strong creditworthiness. Remember to maintain your CIBIL score and then apply for a personal loans.  

Advantages of a Personal loan

  • Instant personal loan approval and payout – If you fulfill your lender’s eligibility requirements for required income, credit score, and repayment terms, your loan may facilitate instant approval and disbursal. This is true for pre-approved offers as well. If you were approved for a loan right away, the next step is to have your loan sanctioned. You can receive this information via text message or email. The disbursement of your loan will be the next stage.
  • Personal loans were previously only available up to a maximum loan sum of 15 to 20 lakhs. However, in today’s world, you can get a personal loan for as much as 40 lakhs or more. For example, the maximum amount that can be borrowed from HDFC for a personal loan has now been removed. You may be qualified for the maximum loan amount if you match their income limits and other criteria.
  • Personal loans have an interest rate that starts at 9.85 percent. It differs each bank and is determined by your eligibility criteria, which include your income, credit score, and ability to repay. Based on these parameters, banks give you a suitable interest rate. The repayment duration for a personal loan might be anywhere from one to five years.
  • Prepayment option – Prepayment options for personal loans are also available. Personal loans often include a 12-month lock-in period, which means you must pay the bank at least 12 EMIs before you can prepay your loan.

Fees and Charges for Personal Loans –

  • Interest Rate – The influence of your interest rate on your monthly payment or total interest charge may be obvious.
  • Fees for processing – Your loan application will be processed for a one-time charge. You do not need to pay this charge separately. It is instead deducted from the total amount of your loan when it is paid off. On the other hand, the interest charges will be on the total amount.
  • Late payment fees – If you pay your EMI after the due date, you may be require to pay late payment fee, which is usually 2%. Different banks have their different set of charges and fines. You should research well before finalizing a lender. 
  • Charges for foreclosure – You will have to pay a foreclosure fee if you pay off your loan before the end of the initial term. This, too, differs from one bank to the other.

Final Thoughts

Because the interest rate on your personal loan has such a large impact on your borrowing costs, you should make sure you get the best personal loan interest rate possible. You must figure out which lender in the market has the cheapest personal loan processing fees.

You need to figure out which lender will provide you the most time to settle your loan. Every borrower expects quick loan amount disbursal, and he expects excellent customer service. 

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