Bank provides personal loans for marriage purposes, house renovation purposes, travel purposes & medical purposes. Banks offer loans up to Rs.25 lakh for personal loans. Banks do not ask for proof of expenditure for the personal loans being taken. And the tenure for the loans is usually five years from the date on which the loan is being taken. Bank starts the installments with immediate effect for the loans being obtained. There is a two-way process while applying for personal loans. One is through the online loan process, and the other one is the offline process. The online process is when the borrower needs to go on the bank’s official website and apply online for the loans. And the offline process is a process in which the applicant needs to submit all the necessary documents in the bank branch and fill-up the form manually, entering all the essential details of the borrower. Banks charge interest rates of 9.60% per annum, which can go up to 30% per annum. Many NBFC’s provide loans to the borrowers, which are usually charged at higher interest rates.
The market for personal loans is continuously growing in India. Due to the covid-19 pandemic, many people have faced problems like reduced salaries and pay cuts, thus leading to lesser salaries in the hand of the borrowers. In such cases opting for personal loans to help ends meet is necessary. Also, the hospitalization expenses of the people have increased due to the pandemic, for which people can opt for personal loans to pay the medical bills. Also, the marriage purpose, which is a major expense for the people, can be fulfilled through personal loans. Purchase of electronic goods is another purpose for which loans are taken. The electronic goods from the leading electronic stores across India can be availed at 0% interest rates from the banks or finance companies that have tie-ups with the stores. Only the processing charge is being taken from the borrower. Bank expects a CIBIL score of a minimum of 700 points for the approval of loans. If the loan is rejected by one of the lenders, the applicant can avail of a loan from another lender who may approve the loan. In case of a low CIBIL score also the lender may approve loans at higher interest rates to the borrower.
Following are the necessary criteria for which loans are approved from the bank
- Ensure that all necessary documents are able be provided by the borrower to the lender
- Ensure that the CIBIL score of the borrower should be a minimum of 700 points & above
- Ensure that consistent income the borrower should have while applying for the loans. And also, the borrower should be able to provide proof of the document before approving the loans
- In the case of being self-employed, the borrower should also be able to provide income proof with the help of the P&L statement and turn over records of the business
- The salary of the borrower usually should be a minimum of Rs.25,000. Only, in that case, the bank can approve the loan
- There should not be any default in the case of previous loans, which the borrower would take
Benefits of the Personal Loans
- Funds can be utilized for any of the purposes without the consent of loans
- Personal loans can be availed for multiple purposes without any approval of the bank for the expenditure
- Personal loans are available at attractive interest rates to the borrower starting from 9.60% onwards. The average interest rates charged are in the range of 11-15% per annum
- Personal loans help satisfy the needs of the borrower with lower savings as well in the bank account
Thus, availing of personal loans is highly recommended to borrowers with low or moderate-income. The medical expenses can also be covered with the help of personal loans, which is a very important factor during the Covid-19 pandemic. Personal loans help people spend money even while having a low bank balance in their accounts.