What is Personal Loan?

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It is type of unsecured loan and helps to meet your financial needs. Personal loan gives you the flexibility to use funds as per your convenience and need. This is instant cash and can be used for traveling, wedding, medical emergency, home renovation etc. To know how to get an easy Personal Loan check personal loan eligibility criteria.

Personal Loans Advantages

  • If you have cash commitment then personal loans are best way to go. There are many advantages of personal loans are as follows
  • You need not give any security for personal loan
  • Large amounts of loans are available in market. In India personal loans gives between Rs.50000 and Rs.30 lakhs.
  • Process is very simple and fast. Most personal Loans are given within a week and for this you have to give simple documents only.
  • Bank is not concerned what you will do with money. It only concerned with your ability to pay back loan.

Choose best bank for your personal loan

Before you start applying for personal loan it is important to choose best bank for it. Thus process of choosing best source of personal loans is as follows below. See Types of Personal Loans in India

  • First, check out banks in your area who are giving personal loans. Because, there may be limits on how much loan bank can give. If you want excess money then you can look for other banks.
  • Gather data from all banks in your area. Then compare them to choose best loan and you can apply in chosen bank. Do not apply in number of banks and then choose one.
  • Check EMI per month that you need to pay. You can multiply this by total tenure of loan to know exactly how much you are paying extra. You can do this for different banks to find out where you need to pay least.
  • Most banks charge processing fee to disburse your personal loan. Compare different banks fees to get an idea of expenditure. There is no need to pay fees to any person when you take personal loan
  • Compare prepayment charges for different banks if you are planning to pay off your loan in lump sums. You can opt for those that allow 0% prepayment charges.
  • Most important is Interest rates to choose personal loan. Interest rates are two types these are flat interest rate and reducing balance interest rate.
  1. Flat interest rate remains same throughout the tenure of your loan. It works out to quite expensive so it is best to avoid this type of rate.
  2. Reducing balance interest rate is calculated on reducing principal amount. This is less expensive and your best option when you are taking your personal loans.
  • It is important to collate all these factors to arrive to avails suitable personal loan for you.

Things to do before applying for personal loan

Process of taking loan is easy and fast. However, if you want process to go smoothly without any problem then you need to do preparations for it. These preparations are below. Know Five things to remember before taking home loan

  • Gather information from internet as well as your local area branches. You can the compare them at home to choose best and when you go out to apply for loan you will be well prepared and need not waste any time.
  • All banks require an identity proof, photo ID and you need to submit statements for last two month.
  • You need to furnish any one of above documents as your age proof.
  • You need to submit an income certificate and your current salary slip.
  • Most banks will require job proof and provide Form 16 or an appointment letter for last two months.
  • If you are self employed you may need to submit profit and loss statement, balance sheet or partnership deed as proof of income. Also submit proof of your banking history, account statement.

How to apply for loan

It is easy to get personal loan if you are salaried person. Minimum salary requirement and maximum personal loan amount offered depend on your profile. It is simple way to get sit at home and apply online.

After filling a personal loan online form then executive from bank will come and collect the documents. Once they get verified you get loan amount credited in your account. Apart of that there are options to visit the branch.

Thus if you want to know your EMIs check Personal Loan EMI calculator and apply for personal loan as per your need. You make sure you maintain good credit score to avail personal loan easily. Also see how to check CIBIL score for personal loan?

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