Find Answers to Your Personal Loan Faqs
Looking to apply for a Personal Loan to tide over a cash crisis? We explain the most frequently asked questions to guide you as you go about choosing the right Personal Loan from the right lender.
When there are wedding expenses to be met, or if you have home improvement on the agenda, whether you are funding your child’s higher education or need to meet the expenses of a sudden medical emergency, Personal Loans are the quickest way to procure money.
Here are answers to common queries that most of us have as well as a few tips for applying for a Personal Loan. Read on to make an informed decision of how to choose a lender and all that which goes into getting your Personal Loan sanctioned.
Why Apply for Personal Loans?
Personal Loans require minimum documentation and have a wide flexibility when it comes to usage. They can be processed fast—with some lenders taking just 5 minutes to give you online approval and transferring the money into your account in just 72 hours! This is what makes Personal Loans a favourable option to finance your urgent monetary requirements. Personal Loans are a good tool for debt consolidation and with short repayment tenure of 1–5 years, they are a popular choice for financing.
To know the common ways in which a Personal Loan may be put to use, click here:
What Are the Different Types Of Loans?
- Unsecured Personal Loans: These loans require no collateral and are the quickest way to secure a loan; all they need are certain documents (such as your bank statement and ID proof) and an online application.
- Secured Personal Loans: These loans require collateral such as a property or a vehicle. Such types of loans have a lower interest rate.
- Unsecured Bad Credit Personal Loans: These loans tend to have a higher interest rate, depending on your credit score.
- Guaranteed Personal Loans: These require a proof of repayment and they may be linked to your salary or your Personal Loan eligibility criteria.
The most popular types of Personal Loans are unsecured Personal Loans that are usually available for amount up to Rs 25 lakhs in a tenure that ranges from 24 months to 60 months.
What Is the Applicable Rate Of Interest On A Personal Loan?
Interest rates vary from 11.9% to 31% and from lender to lender, so it is advisable to compare them before making a final decision. During the Personal Loan sanctioning process, the lender also examines your credit score. If you are a habitual defaulter, you may have to pay a higher interest rate. If you are a pensioner, some lenders may levy a smaller interest rate.
How is a Personal Loan Repaid?
A Personal Loan is usually repaid in EMIs or equated monthly instalments. An EMI is the total of the principal amount and interest on the Personal Loan, added up and divided over your chosen tenure. This ensures that you do not feel the burden of repayment and can plan your monthly finances around your usual expenses as well as the EMI amount.
What other Aspects does a Lender Look for?
The lender will examine your Personal Loan eligibility criteria, which includes your earnings as well as spousal income.
To check your Personal Loan eligibility, click here:
How Much to Borrow?
Though you will be tempted to take a loan of a bigger amount than what you need, we advise you to always borrow the minimum amount required. If you already have a liability, then borrow only as much as is absolutely essential.
To find out what EMI you can afford given your income as well as the usual rate of interest, click here:
How Costly is Defaulting on a Personal Loan?
Defaulting on a Personal Loan repayment may result in an increase of interest rate as well as a bad credit score, which will impact all your future loans. So, borrow only as much as you can repay. In case of difficulty in repayment, enquire about amendments to the loan terms and whether the lender is open to arbitration.
Is it OK to Apply for Personal Loans to Pay off Credit Card Debts?
Credit cards levy high interest rates thus it is sensible to apply for Personal Loans to pay off credit card debt. Personal Loans are a good tool for debt consolidation and you can work out a tenure that suits you with your lender. So instead of making small multiple payments to your credit card company, you can replay by using a Personal Loan repayment scheme.
How to Choose a Lender?
There are several key points to keep in mind while choosing a lender.
- Interest Rates
- Loan Processing Fees
- Documentation Charges
- Amortization Schedule Charge
- Pre-payment charge
- Foreclosure charges
- Total Repayment Outgo through EMIs
- Loan Tenure
- Floating or Fixed Interest Rates
Sometimes, additional charges are applicable if swapping of post-dated cheques is done or payment mode is altered, so read the fine print carefully before signing the documents.
Have more questions? Read all the FAQs concerning unsecured Personal Loans here:
Personal Loans are the most commonly used financial aid, and in your search to find one that fist the bill, don’t forget to research the features of Personal Loans offered by Bajaj Finserv Ltd. With low rates of interest, a hassle-free online application and fast loan disbursal, these may be just the loans you are looking for.
See the benefits of getting a Personal Loan from Bajaj Finserv here:
Interested in applying for a Personal Loan? Apply online here: