PERSONAL LOAN
Personal Loan is an unsecured credit provided by financial
institutions based on criteria like employment history,
repayment capacity, income level, profession and credit history.
Personal Loan, which is also known as a consumer loan is a
multi-purpose loan, which you can use to meet any of your
immediate needs.
What are the benefits of availing of a Personal
Loan?
Other types of loans like Home loan or Loan against
property where you must provide several documents,
Personal Loans require minimum documents and the
approval process is quick.
With various financial institutions offering Personal Loan
online . The loan amount is disbursement within a few
hours provided the BANK/NBFC is convinced of your
repayment capacity.
Another feature of Personal Loan is that the Bank offer
you the flexibility to choose your loan tenure. Usually
Personal Loan tenure ranges from one to seven years.
So you can select the loan term based on your
repayment capacity. You should opt for a shorter loan,
so that you can save on the interest payment and repay
the amount faster.
QUESTIONS OF PERSONAL LOAN
1. What is the maximum amount that
you can borrow?
The maximum amount that you can avail depends
on your income level, your profession and the
PERSONAL LOAN
lender’s assessment of your loan application.
Generally, the lenders sanction the loan based on
their calculation, so that the EMI is not more than
40% - 50% of your monthly income. Also, the
lenders consider if you have any dues while
calculating the loan amount.
If you are a business owner or self-employed,
Bank will determine the loan amount based on the
profits earned and recorded in the profit and loss
statement. If you are a salaried professional, the
lender will determine the amount based on your
salary and other liabilities.
2. Is it possible to apply for a joint
Personal Loan?
Yes, you can apply for a Personal Loan jointly with
your spouse, or any other family members like
parents or siblings. One of the benefits of applying
personal loan with a co-borrower is that the
lenders will consider both the applicants’ income
while determining the loan amount. This means
that you can apply for a higher loan. However, you
must know that if the co-borrower has a poor credit
history, there is a risk that the lender might reject
your loan application.
3. What are the documents required for
Personal Loan application?
PERSONAL LOAN
Although the documentation varies from lender to
lender, some of the essential documents you must
provide along with your application form include:
Proof of income (salary slip, bank account
statement, ITR forms)
Proof of residence and identity proof
Certified copy of your degrees and licence
(this is applicable only for self-employed
applicants).
4. Are there any foreclosure charges?
If you decide to prepay the loan before the end of
the actual term, the lender may levy penalty
charges known as foreclosure fees. This penalty
usually ranges from one to two percent of the
outstanding amount.
