Frequently Asked Questions (FAQs) on Personal Loan
What is a Personal loan?
Personal loan is an unsecured loan i.e., one don’t need to give any security to take personal loan from bank. It is granted on the basis of one’s Income and Credit history. The range of Personal Loan is from Rs.50,000 to Rs.50 Lakhs In India and are available to both Salaried and Self-employed customer. Generally, people take Personal Loan when money is needed for Marriage expense, Hospital Emergencies, major Home Renovation etc.
What are advantages/benefits of taking personal loan over other loans?
Advantages: ✓Usually no guarantors required ✓less documentation ✓quick clearance & disbursal (within 4 to 7 working days on applying) ✓No restriction over spending of Personal Loan Amount.
Banks get more cautious and selective while giving Personal Loans to customers as Personal loan is an unsecured loan. While granting personal loan, banks ensures stable income, assured sources of earning and good credit history of the customer. If you fulfill this criteria, then you get to choose bank that satisfy your requirements, interest rate charged and re-payment options.How to get the lowest interest rate on Personal Loan?
The only key to this is comparing every aspect of the personal loan from interest rate to processing fee charged. If you need help, feel free to get free advice from LoanUncle.org’s support team.
What to compare or ensure before taking loan?
Compare Interest Rate offered, processing fees, loan amount disbursal time and ensure about pre-payment and part-payment charges.
How to check if I am eligible for Personal Loan?
Generally, Banks grant personal loan on the basis of Income and Credit history. However, there are some other factors that varies from bank to bank. Factors that are considered while granting loan includes: Salary, Credit history, Place of work etc.
What is the maximum personal loan tenure?
Personal Loan is a short term loan. Personal loan is usually granted to be repaid from minimum 6 months to 5 years. However, most banks prefer giving it for 3 to 5 years.
Is there are any fees or charges to be paid and when to pay it?
When one takes loan, the loan not only carry the Principal and interest but also other charges as well which may include Processing Fee that bank charges to process loan file and pays it to the processing hubs, charges might vary from 1 to 2% of the loan amount sanctioned by the bank. Apart from this, there is Pre-Payment Charges that loan carries for as a Pre-Closure charge for the Loan. It is always advised to take loan from the bank that charges no penalty for the pre-closure (closing before the tenure ends) of loan as it may happen in the future that you would have enough money to pay your debt to save interest on the same.
How much rate of interest that banks charge?
The interest rate charged on various loan product from bank to bank. And generally it varies from 13% to 25% depending upon your net salary, credit history, profile and the policies/scheme at the time you take loan.
When I’ll get the loan money?
Generally, banks disburse personal loan amount with 4 to 7 working days. However, it is suggested that you provide all the documents asked by the banks including post dated cheques (PDCs) in order to avoid delay in disbursement of loan amount in you account as the amount is transferred only when all the requisite documents in checked.
Can I apply jointly for loan with my parents or spouse?
Yes. Personal Loans can be taken with a co applicant. Co applicant can be your parents or your spouse. Applying with a co-applicant increases your income eligibility so as to borrow bigger loan amount as Banks consider total income while judging your loan amount eligibility.
Do banks offer any relationship discount?
Banks may offer relationship discounts by decreasing the interest rate if you’re a credible and old customer of the bank and has salary account with the bank. One is supposed to ask their bank if they could give some discount for the relation you had with the bank. They may also give you other discount in the form of charging less processing fee and the like.
When do I need to start repaying my loan?
Mostly the EMI starts deducting from the 1st day of every month. Banks, before granting loan, ask all the customers to submit post dated cheques (PDCs) or to give the bank authority to deduct EMI monthly from you savings account directly. It is also suggested to ensure the date of deduction of EMI from Bank.