All You Need To Know About Personal Loans
The number of people taking personal loans is increasing day by day. They can use this amount of loan to meet their expenses like a wedding, buying a car, for medical purposes, for educational purposes, or for buying a house.
What is a Personal Loan
Personal Loan is an unsecured loan. Unlike a car loan, home loan, or gold loan in personal loan there is no need to pledge any asset. You can get a personal loan from any banking or non-banking financial organization.
However, the rates of interest are very high in case of a personal loan as compared to a car loan, home loan, or gold loan. The reason is that you don’t pledge anything to the bank or the non-banking financial company. So there is a lot more perceived risk in personal loans. However, the probability of getting a personal loan depends on your credit history and your source of income.
It is important to note that if you do not return your loan in any case then it will affect your credit history and you would not be able to get any credit card or any loan in future.
- First of all your age should be greater than 21 years and less than 58 years.
- Besides that, you should have some clear source of income.
- Your credit history should be good.
Click here to know more about personal loan eligibility.
Duration for Personal Loans
A person can get a personal loan maximum for 5 years. Some banks provide it for 4 years maximum.
However, the minimum time period to return a personal loan is one year.
Disbursal time is a maximum of 7 days. But if you have complete documentation then your loan can get disbursed within two days.
Amount of Loan
The minimum amount of personal loan that you can get is Rs 30000 and the maximum is 25 Lacs. However, the bank decides the amount of loan to be sanctioned based on your credit score and employment. If you have a good credit score and a good source of employment then you will get a good amount of loan.
Personal Loans Interest Rates
Although rates of interest vary from bank to bank but still here is an idea of interest rates. It starts at 10.75% and can go up to 22% per annum.
There are some additional charges that you have to pay to the bank while applying for a personal loan. These are non-refundable. Mostly these are 1 to 2 % of the principal amount.
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Special Note: An individual must examine the whole EMI amount payable to the lender with the Personal loan EMI calculator.