If you are planning for your higher studies, want to go for a vacation for a couple of weeks, need to meet any sudden medical emergency or anything else.
For all your needs a personal loan is a great way to fulfill the requirements. Most of the banks, NBFCs and financial institutions provide loans at attractive interest rates.
However, to get personal finance, you should know everything about it. Be it a benefit, interest rate, eligibility, document checklist, procedure to apply and so on.
Let’s have a glimpse of personal loans, everything you should know as detailed below:
|Rate of firstname.lastname@example.org% per annum|
|Loan amount||Up to Rs. 25 lakhs|
|Repayment tenure||Up to 7 years|
|Processing fee||Up to 2% of the loan amount|
|Bank||Min Interest Rate (p.a)||Processing Fee|
|SBI Bank||10.50%||Up to 1%|
|Kotak Mahindra Bank||10.75%||Up to 1%|
|HDFC Bank||10.50%||Up to 1%|
|ICICI Bank||10.75%||Up to 1%|
|IDFC First Bank||10.55%||Up to 1.15%|
|Axis Bank||10.50%||Up to 1%|
|Yes Bank||10.50%||Up to 1%|
|IndusInd Bank||10.70%||Up to 1.75%|
|Bank of Baroda||10.50%||Up to 1.15%|
|Punjab National Bank||11.00%||Up to 1.25%|
|Karur Vysya Bank||11.15%||Up to 1.75%|
|Standard Chartered||12.00%||Up to 2%|
|South Indian Bank||10.50%||Up to 1.50%|
|Tata Capital||11.99%||Up to 2%|
|Fullerton India||12.50%||Up to 2%|
|HDB Financial||12.49%||Up to 2%|
|RBL Bank||14.00%||Up to 1%|
|Incred Financial||20.00%||Up to 4%|
|Hero Fincorp||20.00%||Up to 4%|
A fixed interest rate is an unchanging rate which remains same throughout a repayment tenure and the monthly payable EMI remains constant
Floating rates are also known as variable personal loan rates which are affected by fluctuating economic conditions. You can avail low-interest rates initially, but the banks can modify the rates according to the repo rate. Therefore, the interest payable throughout the loan can vary during the tenure.
The CIBIL score reflects the repayment capability which plays a vital role in procuring low interest on loans. If you have a good credit rating, you can avail an attractive rate of interest.
Besides your credit score, the bank also analyzes your past credit history to determine your current interest rate. A clear credit record with no default on EMIs & disciplined payment are preferred.
Your income substantially determines your interest rates for a loan. If you affiliate to a high income, then the banks spot you as more likely to pay back the loan timely and extend more competitive rates.
|Type of Fees||Applicable Charges|
|Penal interest||Delay or late payment will be levied 2% to 4% of penal interest charges|
|Processing fee||Up to 2% of the loan amount|
|Prepayment charges||Up to 5% charges on outstanding loan amount with tax|
|Bounce charges||Up to Rs. 1000 per instance|
|Part prepayment charges||Up to 2% on the part prepayment amount with tax|
|Penal interest||24% per annum – 2% of every month of overdue installments|
|Credit report issuance charges||Rs. 50 for every instance along with applicable taxes|
Equated Monthly Installment (EMI) Facilitates the borrowers to calculate their monthly payable EMIs. This amount will be paid regularly to banks or financial institutions for a certain tenure period. It carries the combination of interest & principle that is paid in a single amount.
The sum of payment & interest together is divided by tenure. Moreover, at an initial stage, applicable rates on the installment would be higher & after each payment, the EMI will be lower.
If you want to take a loan no matter whether you avail it for a home loan, business loan, car loan, or any other personal finance. Knowing your monthly payable EMI is important element to plan your funds accordingly.
EMI Calculator is an auto-calculator online tool and a user-friendly device anyone can use it without involving a third party.
Easy Formula to Calculate EMI:
P x R x (1+R)^N / [(1+R)^N-1]
P stands for Principal
N stands for Loan Tenure
R stands for Monthly Interest Rate
If the borrower avail a loan of Rs. 10,00,000 at an interest rate of 8.10% for a repayment tenure of 4 years, what will be the EMI?
Principal Amount: - Rs. 10,00,000
Rate of Interest: - 8.10%
No. of Monthly Installment: - 48 months or 4 years
|Monthly Payable EMI||Rs. 24460|
|Total Interest||Rs. 174075|
|Total Payment||Rs. 1174075|
A few points that should be kept in mind while applying for personal finance are listed below -
Income - Banks check your income to decide whether you are eligible to avail a loan or not. If your income is higher then you can avail a higher loan amount.
Monthly income – Banks also want to know your monthly earnings, if you are a salaried borrower then your monthly income must be Rs. 25,000 and if you are a self-employed borrower then the annual turnover of your business must be more than Rs. 12 lakhs.
Borrower's age – Banks ask your age to evaluate the tenure schedule. Usually, a longer period will save your amount on the monthly EMI, and this results in non-default on repayment.
Also read: - Apply for Instant Personal Loan Online
Applicants earning an income of at least Rs. 25,000 and fulfill the eligibility requirements can get an instant personal loan. The applicant has to show their KYC documents and relevant income proof for the fast application processing & loan disbursal. It also depends on the income, job stability, work experience, age, and CIBIL Score.
If the borrower is a student and wants to finance their higher education or is looking to finance a big-ticket purchase, they can get a co-signer and apply for personal finance.
Retired individuals who are getting their monthly pension are eligible for a personal loan. Whether the borrower is a defense pensioner or a government pensioner, if you meet the necessary requirement, then you can avail such funds without any hassle.
Personal finance is a form of unsecured loan which can be availed for several purposes, the borrower can get the maximum loan amount of Rs. 25 lakhs with a minimum documentation.
Eligibility criteria depend on several factors such as monthly salary, age of the borrower, total work experience, business income, sales turnover, credit score, and creditworthiness, etc...
For salaried individuals
For self-employed individuals
Identity Proof (Any one of the following)
Address Proof (Any one of the following)
Financeseva allows individuals to compare and choose the best deals offered by the top banks and NBFC for personal finance.
Step by step online process
Step 1: - Visit the official website of the preferred bank & check your eligibility.
Step 2: - With the help of using the EMI calculator, you can calculate your monthly payable EMIs.
Step 3: - Then, fill in an application form.
Step 4: - Enter all the required details and choose the loan amount needed & the repayment period.
Step 5: - After filling in an application form, click on the ‘submit’ button.
Step 6: - When you submit an application form the bank representative will go through your application and get in touch with you for further formalities.
Step by step offline process
Step 1: - Visit the nearest branch of the preferred bank.
Step 2: - Ask for an application form to acquire a loan and fill it with all the required information.
Step 3: - Submit all the required documents such as income proof, address, age proof, identity proof, etc.
Step 4: - The bank representative will inspect all the documents and justify the eligibility of an individual.
Step 5: - After that, the loan amount will be credited to the applicant bank account.
To experience a seamless process approach Financeseva who will help you in getting a personal loan from best lender at best deal. Share your basic details to check your personal loan pre-approved offers.
What is a Personal loan?
Personal finance is a form of unsecured loan in which the individual does not need to mortgage any type of security or collateral in aspects of availing loan.
What is a Personal Loan EMI?
When you borrow loans from banks/NBFCs, you have to pay certain EMI (Equated Monthly Installment) on a monthly basis till the end of the loan tenure. EMI amounts include principal loan amount & interest rate, these EMI will remain constraints.
What are the benefits of getting personal loans?
The main benefits of getting personal finance are -
Who is eligible to get a personal loan?
Entities such as self-employed and salaried individuals with stable income are eligible to get a loan.
Which bank is best to avail a personal loan?
There are many banks and NBFCs that offer personal finance at an affordable rate. Listed below are some banks that are preferred by many borrowers -
What are the mandatory documents required while applying for a personal loan?
The mandatory documents required while applying for a personal loan are -
How to apply for a personal loan?
Visit the official website of the preferred lender and fill in an application form, enter all the required information and needed loan amount. Thereafter, within 24 hours the bank representative will get in touch with you for further formalities after analyzing your application.
Also read: - How can you protect yourself from fraud while taking out a digital personal loan?