Need money for renovating your home, to take care of some medical need, higher education for children, purchasing something expensive or even a family vacation! The Personal loan can very much come handy to take care of your plethora of needs.
What is a Personal loan?
It is a loan which is unsecured, since it is not taken against any asset. Undoubtedly, the interest rates are really high for these. It can be availed by banking or a non-banking financial company. The best aspect is you can utilize it for any need, the bank or the financial company does not monitor as to the reason it is being used for.
Some pertinent points about Personal Loan:
- There is definitely an eligibility criterion which the bank takes into consideration when passing the loan. The criteria include age, income, credit history and your residential status.
- The loan duration mostly falls from 1 to 5 years of span.
- The bank has strict criteria as to the amount of loan which can be passed. It is a rule that the EMI cannot be more than 40-50% of the monthly income. And, when you are a self employed the value of the loan depends on the amount of profit earned in accordance with the latest profit/loss statement.
- In order for the bank to decide on the maximum amount of loan which can be given to you, a plethora of key factors are taken into consideration. So, there is the credit score and the current income level, which has an impact on the decision of the bank. If you have many numbers of unpaid credit card bills or some sort of loan EMI, which is still already there, a lower personal loan amount will be lent to you.
- You also need to decide with respect to the floating or fixed interest rates. The EMIs are fixed in case of fixed interest rate. However, for floating rates the EMIs continue to alter.
- Then, there is also the reducing and flat interest rate. If you pursue the reducing interest rate you will be liable to pay interest on the balance which is left after subtracting from the principal repayment. However, for a flat interest rate you are required to pay interest for the entire loan.
How to choose the lowest possible EMI?
All thanks to the online tools, you will with immense ease be able to utilize the personal loan EMI calculator in order to get knowledge about the interest payout in the loan period. It will make sure to let you take decisions about the repayment capacity for the same.
Is there any sort of extra payable charge?
The lender charges 1-2% of the loan principal as a part of the processing fee. This is in addition to the interest you are paying the financial institution or bank.
What documents are required?
The following documents are required:-
- Documents for income proof
- Documents for address proof
- Documents for identity
- Certified copies of degree or license.