Apply for personal loan keeping personal loan in mind

by Dhara Mehta Content Writer

Time and again, personal loans have proven to be of great help in situation where there is an immediate need of money and you don’t want to get it with any undue hassles. Mostly unsecured in nature, personal loans do not require any need for a collateral or security as a mortgage. However, this is the main reason why the interest rates are higher too. The risk for the lenders constitutes to the high rates.

As of now, an applicant for personal loans can get one in the range of 10,000 to 20 lakhs INR depending on the repayment abilities and track record. Here, the track record is the history of previous credit based payments. It determines whether the applicant has been able to pay on time etc.

Today, applying for a personal loan have become much easier thanks to the internet. A person is able to apply for a loan online within minutes. Once all the criteria are met and the required documents are submitted, one is able to get the loan in less than a week’s time. The online websites of the leading banks are now equipped with an EMI calculator. All one has to do is enter the principal amount and the tenure. The calculator then calculates the EMIs the personal would be required to make taking into consideration the personal loan interest rates.

Before applying for a personal loan in India, it is necessary to conduct a thorough research as to which bank is offering the best deal in terms of interest rates, EMI schemes etc. Some preparation done in this cause will help get the personal loan with flexible terms and conditions and a lower personal loan interest rate. One should always take only the amount that is actually required and is comfortable to repay in the specified tenure without any financial strain.

All the major banks in India provide loans with a repayment duration ranging from 12 months to 60 months. Most of them charge a processing fee for the application. This often ranges around 1% to 3% of the loan amount and often varied from bank to bank. As far as the personal loan interest rates are concerned, they vary from 14.5 to 22% as of now. Most financial institution often charges a prepayment penalty of 3% to 4% on the outstanding principal amount if one opts to prepay the personal loan. However, if the payment is defaulted on the payment, the banks might charge around 24% p.a. on the outstanding amount from the date of default.

Some of the factors affecting the eligibility criteria for a personal loan are:

· Credit score of the applicant

· Repayment capabilities

· Age of the applicant

· Income of the applicant

· Job status

So if you are planning to apply for a personal loan, always compare the different banks on the basis of their interest rates, EMI schemes and other offers. This way, you can get one that will be ideal to your goals and requirements.