Personal Loan
A personal loan (also known as a consumer loan) is a loan given to any individual who requires money to meet personal needs. Simply put, it is an unsecured loan taken by individuals from a bank or a non-banking financial company (NBFC) to meet their personal needs. It is provided on the basis of key criteria such as income level, credit and employment history, repayment capacity, etc.
Personal loans help the households meet any shortfall they experience in buying a house or a car, in children’s higher education, or even in cases of medical contingencies, among other things. Here’s a low down on personal loans to understand them better.
Unlike a home or a car loan, a personal loan is not secured against any asset. As it is unsecured and the borrower does not put up collateral like gold or property to avail it, the lender, in case of a default, cannot auction anything you own. The interest rates on personal loans are higher than those on home, car or gold loans because of the greater perceived risk when sanctioning them.
However, like any other loan, defaulting on a personal loan has its own adverse implications, as it would reflect in your credit report and cause problems when you apply for credit cards or other loans in future.
It can be used for any personal financial need and the bank or a non-banking financial company (NBFC) will not monitor its use. It can be utilized for renovating your home, marriage-related expenses, a family vacation, your child’s education, purchasing latest electronic gadgets or home appliances, meeting unexpected medical expenses or any other emergencies.
Personal loans are also useful when it comes to investing in business, fixing your car, down payment of new house, etc.
Why the future of lending is Digital:
Today, with the rise in smartphone usage and internet penetration to the deepest of the urban and even rural masses, there has been a major shift in consumer behaviour and expectations shaped by purchase/ transaction experiences offered by e-marketplaces like food delivery, e-commerce giants like Amazon, Flipkart, Big basket, and travel portals, mobile banking, etc. So customers are more than keen in adopting digital avenues to obtain credit as well.
Owing the complexities of mainstream traditional banking, it is difficult for borrower to access timely and adequate finance in a smooth manner.
Lending companies have becomes more customer centric and understand that they need to give a superior customer experience, faster turnaround time and adoption of technology like AI, which is possible only through online mode.
The presence of a positive regulatory environment makes Digital lending a safe and transparent mode of lending.
Variants Of Personal Loans
To cater to the varied urgencies of funds and enable flexible repayment tenure, the borrower has the option to choose between three variants of Personal Loans.
Express Loan
- Maximum Tenor between 7 – 60 days.
- Funds sanctioned and disbursed within maximum 24 hrs of online application.
- Specifically designed for very urgent cash crunches faced during sudden financial emergencies.
- Bullet repayment option available.
- Maximum loan extended is Rs. 60000/-
- APR-36 to 41%
Short Term Personal Loan
- Maximum Tenor between 6 months
- Designed to meet short term liquidity problems.
- Both EMI and Bullet repayment option available.
- Maximum loan extended is Rs. 200000/-
- APR- 20-30%
Traditional Personal Loan
- Maximum Tenor between 12 months – 36 months.
- Designed to meet long term fund requirement.
- Loan value is maximum Rs. 1000000/-
- APR- 18-28%
Flexibility of use– A significant advantage of a personal loan is its flexible nature. Unlike a car or home loan, this financial resource can be used for any necessity, without limitations. In other words, the amount you borrow can be used to finance a wedding, travel, education, medical expenses; purchase jewellery, electronic gadgets, etc. Put simply, it’s an easy way for you to get out of the immediate cash crunch you’re in.
Fast approval & Quick Disbursement: The borrower simply has to upload some basic set of documents in our website sitting in the comfort of their home anytime anywhere as per his/her convenience and within minutes , will receive the funds as per the eligibility within 24 to 72 hours at maximum , in their provided bank account(s). Meeting the eligibility criteria is key when it comes to a quick hand-out of a personal loan. Having a good credit score is a definite advantage. This makes it your best bet in an emergency. The terms of sanction will be clearly disclosed to the borrower and there will no hidden charges or terms and conditions. Thus the overall process is truly hassle, easy and fast.
EMI Calculator
Easy and minimal documentation: Only a limited number of documents are required which makes the approval process much faster. The primary documents required like KYC documents, and others like :
- Proof of Identity;
- Proof of Address;
- Proof of Age;
- Photo of the Applicant;
- Last 3 months’ Salary Slip/ ITR copies;
- Last 6 months’ Bank Statement
- Other documents, if required
Minimal Interest Rate: Our company offers the most competitive rates in the market makes our Personal Loans one of the cheapest and most affordable in the market. This ensures your EMI remains fixed for the entire tenure of your loan. So there’s no need to worry about ever-fluctuating interest rates that characterise other types of loans.
No need of collateral : The borrower need not have to arrange for any form of security for the funds sanctioned since Personal Loans are 100% collateral free and unsecured. So your assets remain free of any charges. this is a definite advantage. Since it is unsecured, a personal loan is considered the best form of gaining urgent financial assistance. Get the initial steps sorted and you are good to go!
Pocket-friendly repayment – To repay your personal loan, you can opt for EMIs, instalments, post-dated cheques, online payment, etc. Typically, flexible tenures are available and you can choose one that suits you best. The longer the tenure, the lower the EMI, and vice versa.
Personal Loans for Different Situations:
- Travel;
- Higher Education;
- Marriage;
- Home Renovation;
- Medical Emergency;
- Others
Eligibility Criteria:
- Minimum Age: 21 years;
- Nationality: Indian;
- Source of Income: Salary/ Self-employed/ Business Income;
- Credit Score 650+;
- Minimum salary/ Earning from Business: Rs. 25000 per month;
- Minimum default as on the date of the application;
FAQ
A personal loan is an unsecured loan that lets you gather funds for your personal needs. Unsecured loans are that you can avail of without any collateral. You can utilize personal loans for different financial needs, including weddings, travel, paying off your credit card bills, etc. The loan is sanctioned at the earliest without complex formalities. However, your credit score plays an important role in your loan application approval and the interest rate offered by the bank. As in, if you have a good credit score (750 and above), most chance you would get preferential rates or a higher loan amount.
If you are in need of immediate credit, the first thing you need to do is submit a personal loan application form along with applicable documents to the lender which is then verified and approved. After this, the loan amount is disbursed into your bank account. Upon receiving the loan amount, you are required to repay the lender through EMIs (Equated monthly instalments) over the course of the loan repayment tenure.
A personal loan, if used judiciously, can also prove to be advantageous for improving your credit score.
Before you apply for a personal loan online, you should know about the different factors that impact your eligibility for a personal loan. These include:
- Geographic location: The area where you live plays an important role in determining your eligibility for a personal loan.
- Existing credit: If you are already repaying other loans your eligibility for a new loan will be affected.
- Housing situation: If you live in your own house, you have an increased chance of getting your personal loan application approved. This is because if you reside in a rental house, it reduces your disposable income, which will lead to lower eligibility of Personal loan.
- Income: The higher a person’s income, the higher is the loan amount they are eligible for. So, it may be said that your PL also depends on your income.
- Organization: Another determining factor in your personal loan eligibility is the company for which you work. Working for a well-known company that holds a good reputation in the market ensures that you have a stable job.
- Credit history: Your credit history and credit score have the largest impact on your personal loan eligibility. The tenure, the interest rate, and the total loan amount that you can borrow will depend on this.
If individuals want to improve their eligibility for personal loans, they should pay their loan EMIs and credit card dues on time and in full, decrease their existing debt, minimizing credit utilization, and so on.
There are multiple ways for you to pay your personal loan EMI. Here is a list of options for personal loan payment: –
- Via mobile app
- Virtual account via your Net banking
- UPI apps
Easy Monthly Installments (EMI) refer to the monthly payments made by the borrower to the lender. Personal loan EMI is paid against both the principal and interest amount