A personal loan is a loan in which a borrower gets an amount credited in the bank account to satisfy the needs of an individual. Personal loans can be used for marriage purposes, home renovation purposes, medical purposes, or travel purposes. The best part of personal loans is that the bank does not ask for the bills of the expenditure incurred. Or the details about where the money is spent. The borrower is free to spend the funds wherever required by their own choice. The maximum personal loan which the borrower can take is Rs.25 lakh. However, the actual loan approval depends on an individual’s salary based on the borrower’s credit score. The bank expects a minimum score of 700 points and above for the disbursement of the loans. In other cases, if the CIBIL score is lower than 700 points, then, in that case, the borrower can still avail of loans from some of the other lenders at higher interest rates.
The interest rates charged by the banks are in the range of 11%-24% per annum, but in the case of some lenders, the interest rates may go up to 30% per annum as well. Before opting for the personal loan, the borrower should check for the interest rates charged by the banks and accordingly only should take the decision of opting for the right lender with the lowest interest rates. The terms & conditions related to the tenure for repayment of loans, the penalty is charged in case of delay in payments, and the repayment value should be appropriately checked before signing for the loan agreement. The terms can also be modified in case of any terms & conditions are found to be misleading. The borrower should also know the processing fees charged by the banks. Some lenders charge lower interest rates but take higher processing fees which the borrower should check before opting for the loans.
The process of applying for Personal Loan is as follows below –
Eligibility for the Loans:
- The borrower should be able to provide income proof before the approval of the loans in case of a salaried employee
- In the case of self-employed, the borrower should give the profit & loss statement or the bank account statement
- The borrower’s age should be minimum of 21 years and a maximum of 65 years from the date of application
- The borrower should present all the necessary documents required by the banks before the approval of loans
- The applicant should be a citizen of India. And should have active income while availing of the loans
Check for the interest rates & other charges:
Some lenders charge exorbitant rates to the borrowers in case of availing the loans. Thus, the borrower should be careful about the interest rates and the lender’s processing fees. The interest rates should be minimum, as higher interest rates may put an additional burden on the borrower. Thus a thorough survey should be done by the lender before opting for the loans from the lender. The repayment value agreed should be verified by the borrower before signing and agreeing on the agreement.
The application process for the Loans
- Fill up the form online while applying for the loans. Fill the details in the particulars and upload a digital signature if required
- Scan the copies of the required documents and upload them on the website of the bank
- Enter the mobile number after receiving the OTP enter into the system
- Fill in the bank account details to get the amount credited to the bank account
Wait for the application to get processed after the processing amount would be credited to the bank account. Sometimes a verification call may be received from the borrower before the disbursement of loans.
- Fill the application form manually. And also, sign the terms & conditions as agreed along with the passport size photograph
- Provide the self-attested copies of the documents to the bank
- Provide the aadhar card and pan card to help the bank verify the CIBIL score of an individual
- After submitting all the necessary required documents to the bank, it may take around 48 hours for the loans to get approved. And the amount will be credited to the bank account of the borrower
Thus, Personal Loans can be quickly approved by the banks and easily. Only the major condition is that the borrower should have proper documents in place, and also the credit score of the borrower should be good. The process of applying for the loans c