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Apr 03, 2020

Everything You Want to Know About a Personal Loan

Today, an increasing number of people are applying for Personal Loans to satisfy their financial expenses including a medical emergency, for wedding expenses, home renovation, and starting a new business. One of the reasons for the vital rise in the growing popularity of Personal Loan is that being an unsecured loan, it does not require any collateral and the processing time is quick. You can quickly avail of a Personal Loan from any bank or NBFCs of your choice. With the advent of the online services offered by the financial institutions, you can get the money within 3-5 working days.

You can get a flexible re-payment tenure that suits your requirements. And then you have to make the payments in EMI (Equated Monthly Instalments). This EMI instalment amount is calculated using the loan amount, re-payment tenure, and the interest rate.

What is Personal Loan?

Personal Loan is an Unsecured Loan provided by Bank or financial institutions based on criteria like net monthly income, employment history, repayment capability, profession and CIBIL Score. Personal Loan is a multi-purpose loan, which you can use to satisfy immediate financial requirements.

Features & Benefits of a Personal Loan:

  • Personal Loan can be used for any purpose and For example, Car Loan or Home Loan need to be utilised for that specific purpose but the Personal Loan can be used for any purpose like higher education, home renovation, medical expenses, vacation trip, just about anything. The choice is up to you.
  • Collateral-free Personal Loan. You don’t need to mortgage your home, just so you can get that much-needed vacation trip!
  • The maximum amount that you can avail depends on your net monthly income level, your profession, company category and the bank’s evaluation of your loan application. Generally, the banks approve the loan based on their calculation, so that the monthly EMI is not more than 50% of your monthly income.
  • Banks offer lower or higher interest rates depending on the borrower's profession, net monthly salary, Company Category and CIBIL Score.
  • There is minimal documentation required in order to get a Personal Loan. This also cuts down on the processing time for such a personal loan. 
  • The repayment tenure is flexible, and you can choose your tenure as per your suitability. Bank offers tenure ranging from 1 to 5 years, with lowest EMI.  
  • You can also claim tax benefits on the interest payments if you use the loan amount for purchasing, constructing or renovating a home, or for higher study purposes.
  • The process is hassle-free. You can apply for Personal Loan online, through LoanMoney. This process requires minimum documentation and Instant Loan approval.

What are the uses of a Personal Loan?

There are many ways in which a Personal Loan can be used:

  • You can use it to finance higher studies. And claim tax benefits on the interest payments.
  • Weddings expenses are always expensive affairs. You can spend it with a Personal Loan.
  • You can use it to buy that new laptop or iPhone 11 Pro with state-of-the-art technology.
  • Considering buying a home? Or planning to renovate your current home? You can make it happen with a Personal Loan.
  • You don’t need to spend all your savings on your dream vacation trip. You can finance your trips with a Personal Loan for travel.
  • Cash flow problems can also be dispensed with through a Small Personal Loan, so you don’t have to sacrifice on day-to-day requirements during a cash crunch.

How to Check Eligibility for Personal Loan

You need to be sure that you are eligible for a Personal Loan before you consider applying for one. The eligibility criteria allow that you can apply for a Personal Loan if:

  • You are a salaried doctor or CA, an employee of any Pvt Ltd. company or Govt. employee.
  • You are within the age range of 21 to 60 years.
  • You have been a job for at least 2 years, with a minimum of 1 year with the current employer.
  • Your net monthly salary is Rs. 30,000/-  or more.

What are the documents required for Personal Loan application?

Although the documentation differs from bank to bank, some of the important documents you must provide along with your application form include:

  • 2 Passport size Photograph
  • Identity Proof: Adhar Card, Voter Card, PAN Card, Office I-Card, Passport
  • Address Proof: Adhar Card, Rasan Card, Utility Bill, Passport
  • Proof of income (Last 3 months salary slip, Last 6 months bank account statement, Latest ITR forms)

Are there any foreclosure charges?

Foreclosure or pre-closure is the process of prepaying the entire outstanding personal loan in one single instalment, before loan tenure. It depends on Bank to Bank, some banks allow, You can foreclose your loan immediately whereas in other charges up to 2% after a minimum period of 6 months.

What is EMI? And how do I lower it?

EMI (stands for Equated Monthly Instalments) is an important part of a loan. It is the intervallic instalment amount that you pay to clear your loan. It is important to calculate your EMI and find a way to keep it as low as possible. There are three factors that calculate your monthly EMI through LoanMoney EMI Calculator:

  • The loan amount
  • The interest rate
  • The tenure

So what are you waiting for? Apply for a Personal Loan through LoanMoney! Apply Now 

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