FAQs on Personal Loan
What is a Personal loan?
An unsecured loan is called a Personal loan. This implies that you don’t have to give any security, as with a car loan or a home loan, where the underlying asset is mortgaged with the bank. Normally, the bank does not ask for guarantors either. More advantages: minimum documentation and speedy clearance (within three to seven days of applying). And there is no monitoring of 'end use' -- you can use the loan for any purpose you like.
What can I use a Personal Loan for?
Personal loan can be used for anything and everything. There are no restrictions on the end use. You could use the loan money to finance anything from the latest flat-screen-plasma-LCD TV to buying your better-half a diamond ring.
How do I take a Personal Loan?
You can always start by checking out with different banks offering you the loan for the best offers - interests - EMI schemes etc. Also find out the eligibility criteria and the documents required to submit before you apply.
How is my loan eligibility determined?
Loan eligibility depends upon various factors which differ from banks to banks. The main factor of course, is your ability to repay the loan.
Also your profile, in terms of residence and the place you work in also matters.
Do make sure to check all such other eligibilities before applying.
What is the maximum tenure of a personal loan?
Personal loan is a short tenure loan. Most of the banks provide you loan for maximum 3 years (36 months). to max 5 years(60 months).
How much personal loan that i can take?
Loan eligibility depends upon various factors. The main factor is your ability to repay. The bank would like that the instalment you pay should not exceed more than 30 to 40% of your net salary or 2-3 times of your income tax return. Please check the eligibility section (hyper link)of our site to know how much you can borrow.
What are the fees and charges payable and when are they payable?
Apart from the rate of interest bank also do charge some fees which are of Usually two types. Once when you are applying for the loan and once when you are preclosing the loan. The fees when charged at the time of processing called as Processing Fees vary from 2-3% of the loan amount. This could be reduced if you have the ability of bargaining. the second charge is the prepayment penalty paid at the time of preclosure. This too varies from 2 –3 %. Similar to processing charges, you can also try to get this fees reduced.
What is the rate of interest that will be charged on my loan?
The interest rate varies from bank to bank. And usually it varies from 14%-26% depending upon your profile and the policies/scheme you opt for.
How soon can I get my loan money?
Usually banks disburse your loan within seven working days. However, it is recommended that you keep all your documents ready and in order, especially the post dated cheque (PDC), to avoid any delays.
The loan is disbursed only after the completion of submitting of all required documents.
Can I apply for loan, jointly with my spouse?
Yes. Personal Loans can be applied jointly with a co-applicant (either be your spouse or your parents). This helps you to increase your income eligibility and you can also avail for a larger amount of loan, if you want to, as your co-applicants income also gets added to your income and that total is taken into consideration for calculating the loan amount you will be eligible for.
What is relationship discounts?
Lenders offer relationship discounts if you already have a relation with that bank. This basically means that if you are already banking with the lender from whom you seek to avail a loan, they give you certain discounts in the form of reduction in personal loan interest rates or other such charges, sometimes even giving you additional services.
How do I repay my loan?
At the time of applying for the loan, banks ask you to submit all the post dated cheques (PDC). for each month with Emi which is equal monthly installments or they ask you to sign an Ecs(Electronic clearing system ) with the account that you hold. Mostly these cheques/Ecs are presented on 1 st of each month , so please do confirm with the bank on that respect.
