In the previous two years, the pandemic has changed everything, there was a rapid increase in digital transactions, and the same with loan processing and disbursement, which was totally online.
We can also see examples in our daily life like we prefer to make our payments online rather than to visit a mall, local Kirana shops, and markets.
Therefore, availing a loan is very easy nowadays, and the process becomes convenient & digital. But there are some risks of fraud and cheating while applying for a personal loan digitally.
Hence, it is important for individuals to know how to spot these frauds and save themselves from loss.
Mobile apps are an extreme access to a variety of services, but not all apps keep your information secure. Therefore, be careful of the apps that you are installing on your phone and make sure that they are verified and genuine.
Avoid making digital payments unless you are sure whether it is genuine or not. You must browse only official websites which begin from www and their domain name in the URL and avoid non-secure websites.
Signing in your phone to an unsecured public wi-fi connection can be a problem as it leads to cyber fraud. They can track your activities and get access to your mobile phone to commit fraud. Thus, if you are going to make an online payment or share any personal banking details, assure you to make it on a secure connection.
You should never let your card out of sight to anyone when using it to make payments at a restaurant, shop, or while receiving home delivery.
Confirm whether the card reading POS machine is real or not, or a card reader in disguise takes all the data to steal your hard-earned money.
Also, enable the option of international transaction only when you are in abroad, as the two-step verification required in India for payments should be removed.
It is important to have security software for mobile devices and computers. Also, ensure to update web browsers and operating systems periodically.
While setting a new or resetting password avoid creating easily guessable passwords and try to set a strong password with a combination of numbers, special characters, uppercase, and lowercase.
We all get fake phone calls, messages, and emails that are trying to fraud by disclosing your financial information.
Fraud callers may act as employees of some lenders or financial institutions and ask for personal details on the names of card or service expiry, free cashback, unused reward points, etc... Once you provide your personal information to them, they will use it to withdraw money from your bank account.
Fraudulent may call you directly & pretend to be an executive of a technology company. They might even cheat the caller ID so that it displays a genuine phone number from an established company. They will definitely ask you to download an application that provides them remote access to your device.
Therefore, the best thing to do at any request for remote connection to your system is to hang up on them without saying a single word.
Prevent Confidentiality: Do not share your personal information and details such as PINs and passwords with anyone on a call, over chat, or through email.
Constantly Changing your PINs & passwords: Passwords and PINs should be changed twice a year so that it is not permanently recorded anywhere. It will keep you away from any scam.
Stay Informed: - News channels and newspapers always have the information about the reports of loan frauds. You should understand them in detail & be careful of such incidents that happen to you.
See Odd Transaction: - Getting text messages will help you to keep track of any doubtful transaction and enable two-factor authentication on all your corporate and personal accounts.
Track your Credit Report: - Verifying your bank statement once a month is all right but looking over your credit report is even better. If a scammer makes use of your personal information for any financial benefit, then it will be disclosed in that credit report.
| Rate of interest | @7.90% 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 | 10.25% | Up to 1% |
| Kotak Mahindra Bank | 10.30% | Up to 1% |
| HDFC Bank | 10.50% | Up to 1% |
| ICICI Bank | 10.75% | Up to 1% |
| IDFC First Bank | 10.49% | Up to 1.15% |
| Axis Bank | 10.50% | Up to 1% |
| Yes Bank | 10.50% | Up to 1% |
| IndusInd Bank | 10.49% | Up to 1.75% |
| Bank of Baroda | 10.49% | 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 | 10.25% | 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% |
Equated Monthly Installment (EMI) facilitates the borrowers to calculate their monthly payable EMIs. This amount will be paid regularly to banks & 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. However, at the starting phase, applicable interest rates on EMIs would be higher and after every payment, the EMIs will be reduced.
If you are planning to get a loan no matter whether you opt for a home loan, business loan, car loan, or any other loan. Knowing your monthly payment is significant to plan your finances accordingly.
EMI Calculator is an auto-calculator online device, it is a user-friendly tool- anyone can use it without third-party involvement.
P x R x (1+R)^N / [(1+R)^N-1]
Where -
P stands for Principal
N stands for Loan Tenure
R stands for Monthly Interest Rate
For example, if an individual takes a loan of Rs. 15,00,000 at an interest rate of 8.00% for a tenure of 5 years.
Principal Amount: - Rs. 15,00,000
Rate of Interest: - 8.00%
No. of Monthly Installment: - 60 months or 5 years
| Monthly Payable EMI | Rs. 16251 |
| Total Interest | Rs. 85044 |
| Total Payment | Rs. 585044 |
Personal loans are secured loans that let the borrowers acquire loans without pledging collateral or security. These funds can be used for various purposes including higher education, medical expenses, weddings, travel & other requirements.
| Criteria | Self-employed | Salaried |
| Age limit | 21 years to 68 years of age | 20 years to 60 years of age |
| CIBIL Score | 750 or above | |
| Minimum loan amount | Rs. 1 lakh | Rs. 1 lakh |
| Maximum loan amount | Up to Rs. 50 lakhs | Up to Rs. 40 lakhs |
| Work experience / business continuation | 2 to 5 years | Minimum 1 to 3 years |
Identity Proof (Any one of the following)
Address Proof (Any one of the following)
Income Proof
Step by step to apply online -
Step 1: - Visit the official website of your preferred lender & verify your loan eligibility.
Step 2: - By using the EMI calculator for personal loans, you can evaluate your monthly payable EMI.
Step 3: - After calculating your EMI, start filling in an application form.
Step 4: - Enter all the necessary information and choose the needed loan amount & loan tenure.
Step 5: - After filling in the application form, click on the ‘Submit’ button.
Step 6: - After checking your application, the concerned department will get in touch with you for further formalities.
Financeseva will help you -
What is a personal loan?
A Personal loan is a type of unsecured loan that allows an individual to borrow from bank or any financial body if they require a fund to pay for their financial needs.
What is the maximum loan amount that an individual can get to fulfill their personal requirements?
The maximum loan amount that an individual can get is up to Rs. 50 lakhs and it also depends on the profile of the individual.
How much credit score is needed to get a loan?
Basically, a good credit score will help you to avail better offers for a loan. For that, the score must be 750 or above.
For what purpose can a personal loan be used for?
A personal loan can be used for several purposes such as holidays, purchasing consumer goods, starting a small business, buying a vehicle, paying medical bills, and debt consolidation.
What are things to consider while applying for a loan?
While applying for such loans, make sure to meet the eligibility criteria of the preferred lender to avoid a loan rejection.
How to avail a personal loan?
There are many banks, financial institutions, or NBFCs that provide loans by both online and offline, you are required to fill in some necessary information in the application form.
CA Vikas Jain - Our Mentor
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