Get a loan to meet your any personal need
Planning for a dream holiday or yearning for a lifestyle gizmo? Desiring to
gift someone a diamond ring or thinking of renovating your house? Still
more ... if you are looking to meet expenses for child's education or
daughter's marriage or if it just a temporary cash crunch,personal loans
answer all your needs and desires.
Understanding personal loan: The need
A personal loan is a credit extended to meet your personal needs /
requirements. Generally these loans are unsecured, i.e. as a borrower
you are usually not asked for security backup or collateral against the
borrowed amount. The personal loan you get is based entirely on your
integrity and repayment capability.
A personal loan can be availed from any of the major banks or finance
companies.
Getting a personal loan: Loan amount & interest rates
The loan amount and eligibility criterion varies from bank to bank. The
offering bank will assess you on basis of multiple parameters, which
include your repayment capacity, place of work, past obligations, work
experience, residence and age. The bank also considers these set of
factors for determining the lending rate.
If the lending bank perceives higher risk in extending credit to an
applicant, it may choose not to sanction the loan or charge a higher
interest rate in accordance with the perceived risk. At times, banks
ask for additional security in the form of a personal guarantee based
on risk profile of borrower.
Thus, the interest rates on your personal loans could vary from any
where between 15 to 25 percent depending on your risk profile, income
level, and nature of employment.
Say for instance, if you are working in a reputed organisation you might
get a loan at lower rate, when compared to a self employed individual
who might end up getting a loan of the same amount at a higher rate
of interest for the same period.
The basis for interest rates can be fixed, floating or flat. Personal loans
on flat rates are most expensive and charge same interest on principal
amount throughout the tenure of loans. In fixed and floating basis,
rates are calculated on reducing balance and hence these loans are
comparatively less expensive.
Pros and Cons of Personal loans
Planning for a dream holiday or yearning for a lifestyle gizmo? Desiring to
gift someone a diamond ring or thinking of renovating your house? Still
more ... if you are looking to meet expenses for child's education or
daughter's marriage or if it just a temporary cash crunch,personal loans
answer all your needs and desires.
Understanding personal loan: The need
A personal loan is a credit extended to meet your personal needs /
requirements. Generally these loans are unsecured, i.e. as a borrower
you are usually not asked for security backup or collateral against the
borrowed amount. The personal loan you get is based entirely on your
integrity and repayment capability.
A personal loan can be availed from any of the major banks or finance
companies.
Getting a personal loan: Loan amount & interest rates
The loan amount and eligibility criterion varies from bank to bank. The
offering bank will assess you on basis of multiple parameters, which
include your repayment capacity, place of work, past obligations, work
experience, residence and age. The bank also considers these set of
factors for determining the lending rate.
If the lending bank perceives higher risk in extending credit to an
applicant, it may choose not to sanction the loan or charge a higher
interest rate in accordance with the perceived risk. At times, banks
ask for additional security in the form of a personal guarantee based
on risk profile of borrower.
Thus, the interest rates on your personal loans could vary from any
where between 15 to 25 percent depending on your risk profile, income
level, and nature of employment.
Say for instance, if you are working in a reputed organisation you might
get a loan at lower rate, when compared to a self employed individual
who might end up getting a loan of the same amount at a higher rate
of interest for the same period.
The basis for interest rates can be fixed, floating or flat. Personal loans
on flat rates are most expensive and charge same interest on principal
amount throughout the tenure of loans. In fixed and floating basis,
rates are calculated on reducing balance and hence these loans are
comparatively less expensive.
Pros and Cons of Personal loans
If y ou need money at a short notice and do not want to go through the lengthy
process of documentation, personal loan is the best option for you. You can
easily avail a personal loan at a short notice.
In order to avail a personal loan, all you need to do is fill up an application loan
with the lender and you can get it in a period as short as a day. However,
before applying for a personal loan, you should be aware of the pros and cons
of a personal loan.
Advantages of personal loans
• They are multipurpose: Personal loans can serve various purposes like
travel expenses, medical expenses or purchasing jewellery. It can also be
used for home or car improvements.
• Quick and easy availability: If you need money within a very short period
of time, personal loans are of utmost help since you can avail a personal loan
even within 24 hours.
• No tedious documentation required: Usually, a home loan or a car loan
takes you through a lengthy and cumbersome process. This is not the case
with personal loans. Personal loans require very little documentation and
thus save you a lot of time
• No collateral required: Personal loan is an unsecured loan, that is, no
security is required in order to avail this loan. Therefore it is relatively less
risky for the borrower. If you are not able to repay your secured loans
your security is forfeited but this does not happen in case of a personal
loan since you have not pledged anything against it.