Personal loans are unsecured loans that come with attractive features such as instant approval, flexibility in tenor and pre-payment options, a line of credit facility, economical interest rates, eligibility and EMI calculators, and more. You can avail a personal loan for various requirements such as weddings, vacations, home renovation, debt consolidation, medical emergencies, higher studies abroad, automobile down payment, and even home down payment.
Personal loans offer the best financing options to manage your needs in a streamlined and secure manner. They provide an effective solution to your financial difficulties without compromising on any aspect of your day-to-day life.
Here are the answers to everything you need to know about personal loan, interest rates, credit score, repayment and all other queries.
Is a Personal Loan an Unsecured Loan?
Yes. Unsecured loans are those that do not require any security, collateral or guarantors to vouch for you while applying for a loan. For example, you can acquire a personal loan without having to put up your home or any other asset as security or collateral against it. Also, there is no need for anyone else to guarantee that you will repay the loan.
Is a Personal Loan hard to Get?
Not at all. In fact, personal loans are among the best loans to apply for in terms of ease of application and approval. And since their popularity amongst Indians is gradually increasing, financial corporations are beginning to offer a host of attractive features like a quick online application, instant online approval and disbursal of funds within 72 hours when you apply for a personal loan.
Is a Personal Loan better than a Credit Card?
Yes. This is because credit cards usually have a higher interest rate on the debt you accumulate, while personal loans have a comparatively lower interest rate. If you want to pay off your credit card debt you have a limited time to do so within incurring high interest, whereas personal loans allow you a longer repayment duration so you can repay the loan without stress. Also, personal loans give you funds in a lump sum amount, which means you have better control over your money and can use it as per your needs. Finally, one of the major advantages of personal loans over credit cards is that you can consolidate all your credit card debt into a single cumulative loan and then use the personal loan to easily pay it off, hassle-free.
What is Line of Credit and how is it different from a Personal Loan?
The primary difference between line of credit and personal loans is that unlike a personal loan, a line of credit loan only requires you to pay interest on the amount you withdraw. While personal loans ask you to pay interest on the entire principal amount plus interest, line of credit loans ask you to pay it only on the funds you’ve used, which could be significantly lower. Another significant difference is that personal loans are disbursed all at once while line of credit loans are disbursed in parts. Depending on how you’re going to utilize your loan, it’s important to choose the more suitable option between a personal line of credit and personal loans.
What can a Personal Loan be used for?
A personal loan is among the most versatile types of loan available in the market today, which you can use as per your needs and requirements. Any of the following occasions can be a reason for you to apply for a personal loan:
- For a Wedding
Organising the wedding you’ve always dreamt of can be an expensive affair. You can never predict the exact amount of funds you may need for a wedding and you may face a situation where your savings aren’t enough to finance your wedding. In that case you can take Personal Loan for Your Wedding.
- For a Vacation or Holiday
Everyone needs a vacation to recharge their batteries and enjoy the finer aspects of life. The best way to finance your vacation is to apply for a Personal Loan for Travel.
- For Repairing or Renovating your Home
Your home is the one place you can relax and unwind after a hard day’s work. It is always a wise option to invest in the improvement of your home for both comfort and safety. You can apply for a Personal Loan for Home Improvements.
- For a Medical Emergency
Medical treatments can be a costly affair, especially if you’re looking for the best available options for yourself or for your loved ones. It’s also important to pay your medical bills in a timely manner to avoid delays in treatment. You can also take Personal Loan for Medical Emergency as well.
- For Higher Studies or Education Courses
Education lays the foundation for a successful and happy future. Higher studies or educational courses for yourself or your child from a reputed institute opens the doors to better opportunities. Personal Loans for Higher Studies make sure you don’t have to worry about finances.
- For the down Payment on your New Car
Everyone has a dream car they would like to own. But even if you can pay for the EMIs, it is usually the down payment that stops you from buying it. Personal loans are an excellent way to acquire the required funds without dipping into your savings or giving up on your other dreams.
- For the down Payment on your Home
Do you dream of becoming a homeowner? The thought of buying your own home often brings peace of mind to you and your family. However, good homes don’t come cheap. Personal loans ensure that lack of funds never come between you and your ideal home.
How can one apply for a Personal Loan?
Nowadays, applying for a personal loan is easier than ever. As the customer, you can choose whether you want to meet the lender in person to discuss all matters pertaining to your loan face-to-face, or you can avail the benefits of online application. Most lenders today have websites that offer you all the information you need regarding your personal loan, such as interest rates, EMIs, terms and conditions, all details related to charges and fees, etc.
You can apply for your personal loan online in 4 easy steps:
Step 1: Fill in all the details on the online form. (Click Here for Online Form : Apply Online for Personal Loan)
Step 2: Get instant approval and select your personal loan amount and repayment tenor.
Step 3: Keep all the required documents ready for collection.
Step 4: The money is credited into your account!
You can also apply for a personal loan offline. Lenders allow you to call or SMS for personal loan requests. If you are applying to Bajaj Finserv for a personal loan: You can call Bajaj Finserv at this toll-free number: 18002660635 or give a missed call on +91 9211175555. You can also send as SMS by messaging ‘SOL’ to +91 9773633633.
Should you apply for a Personal Loan online or offline?
Both online and offline modes of applying for a personal loan come with their own set of benefits, however, most borrowers find applying online faster and more convenient.
With the online mode of application:
- You can apply while in the comfort of your own home or on the go without taking time and effort to travel to the lender’s office
- You can browse and compare various personal loan offers and choose the best one for you
- You can read other customers’ reviews and testimonials
- You also get low interest rate offers and other pre-approved offers
With the offline mode of application:
- You have the opportunity to interact with experienced representatives and ask them your queries before making any decisions.
Ultimately, the choice depends on your preferences.
How do you check Eligibility for Personal Loans?
Personal loan eligibility is usually very simple. The only information required from you is:
- Date of birth
- Current city of residence
- Company or employer name
- Net salary
- Combined monthly loan EMIs
- Combined outstanding debt on credit card
- Information on whether you have a home loan or not
That’s it! You can find out whether you’re eligible for a personal loan with just these basic details. You can directly check your eligibility with our Personal Loan Eligibility Calculator online which is much easier.
Depending on your details, it is possible to acquire a personal loan up to Rs.25 lakh!
Here’s a list of the documents required to apply for a personal loan:
- Financials—Salary slips of the last 2 months
- Bank statements—Salary account bank statement for the last 3 months
- Employment proof—Employee ID card
- KYC—Identity proof and Address proof (such as your Aadhar Card, Passport, Driving License, etc.)
For more details; click here – Required Documents for Personal Loan
What is the Rate of Interest on Personal Loans and how is it Calculated?
The interest rate on personal loans can be between anywhere between 12% to 24%. Every lender has their own way of calculating your personal loan interest rate.
It is calculated by keeping in mind your:
- Salary and current debt
- Credit score or credit rating
- Employer details
Basically your interest rate depends on your credit risk, which is why borrowers who are considered ‘safe’ by a lender get a lower rate on their personal loan and borrowers who are considered risky need to pay a higher rate of interest. A steady job with a good company, a good record of paying back your earlier debt, little or no current debt, etc., are some of the ways you can ensure a lower rate of interest.
Your personal loan interest per month is calculated by dividing the interest rate by 12. For example, if your personal loan interest is 13% per annum, your monthly interest rate is: 13/12=1.08%.
Are Personal Loan Rates Negotiable?
Generally, personal loan rates are non-negotiable unless you have a very good credit score.
What is the CIBIL score required to avail a personal loan? Can you get a good interest rate with a good Credit Score?
CIBIL (credit) scores can range between 300 to 900, with anything above 750 being a good score to avail a personal loan. However, if you want a hassle-free personal loan application and approval, it is recommended to have a CIBIL score of 750 or above.
You are certain to get a cheaper personal loan with lower interest if you have a good credit score.
Can you apply for a personal loan with a bad Credit Score?
Absolutely. Some customers have bad credit scores because of different reasons, but that does not stop them from acquiring a personal loan. The only difference is that you may incur a higher rate of interest.
How do you check your credit score in India?
Although there are a large variety of websites that offer a credit score check free of charge, the best thing to do is to check your credit score via CIBIL. You can visit the Official CIBIL website and pay a nominal sum to check your credit score.
How do you calculate personal loan EMIs and how to decide how much personal loan you can afford?
Personal loan EMIs are calculated on the basis of three main factors—the loan amount, your chosen repayment tenor and the monthly rate of interest you are charged. Calculate your personal loan EMIs with ease and precision by using the Personal Loan EMI Calculator.
To decide the amount of personal loan you can afford, study:
- Your monthly income
- Your fixed monthly expenditure
Once you deduct your fixed or necessary expenses (such as rent, daily living expenses, obligations such as other loan EMIs and other responsibilities) from your income, you will then see what the left over amount is. From this amount, keep aside a sum as savings. Then you can see what you can afford to pay. The next two steps include studying:
- Your personal loan interest
- Your personal loan EMI
Choose a sum as what you’d like to borrow, and check your interest. Your interest will determine what your monthly EMIs are and you can compare this amount with what you have left over after your fixed expenses and savings.
It is always better, however, to approach your personal loan amount as what you need rather than the maximum amount you get. You can always check the maximum amount you can borrow by using the Personal Loan Eligibility Calculator. Understanding your needs and requirements for the money that a personal loan provides is a more effective way to proceed. This will keep you from over borrowing and getting into a position where you delay or default on your EMIs.
Can Personal Loans be rejected?
Yes. Personal loans can be rejected under the following circumstances:
- If you have a bad credit history
- If your income is inadequate for repaying the loan
- If you have provided incorrect details
- If you have an unstable job history
- If you have a previously rejected loan application that is negatively affecting your credit score
- If you have applied for too many loans at the same time
When do you start paying personal loan EMIs? What is personal loan part pre-payment?
The billing cycle for personal loan EMIs will be from the 26th to 25th of every month and the instalment payment date will be the 5th of each month.
Part pre-payment is a term used when a borrower repays part of the loan in one go, either because he or she unexpectedly received a large sum of money (as a bonus or other income) or because it is a prudent idea to as part pre-payment results in a reduction in your EMI amount or tenor.
You can make a part pre-payment by using Bajaj Finserv’s Customer portal (Experia) after your loan is sanctioned and once you have paid the first EMI. Your Experia ID & password will be shared with you in the welcome letter after disbursal of your loan. A Virtual Account Number (VAN) number can be received by sending an SMS to 9227564444 from any registered mobile number.
You will be charged 2% plus applicable taxes on the part pre-payment amount paid, unless you have opted for a Flexi loan.
What is Personal Loan Foreclosure?
The early closing of a loan – by making a one-time repayment of the outstanding loan amount – is what is commonly called loan foreclosure. Not only does Bajaj Finserv let you foreclose your personal loan at your convenience, but its easy-to-use Foreclosure Calculator allows you to calculate the foreclosure amount. Simply select the number of paid EMIs, the month you want to foreclose your loan and calculate! Easy right?
And remember, you may foreclose your loan any time after the repayment of the 1st EMI. Remember that a foreclosure charge of 4% (plus applicable charges on the principal outstanding) will be applicable when you foreclose your personal loan.
What are the Tax Benefits on Personal Loans?
Since loans are not a part of your income, personal loans are not a taxable fund while filing for IT returns. This means that you don’t have to pay taxes on personal loans. And in some cases, like if you prove that you used the loan for a valid expense, you can save tax and claim tax deductions on the interest paid on the loan.
How does a Personal Loan affect Credit Score, and what happens if you don’t pay your Personal Loan EMIs?
Personal loans can play a very influential role in boosting your credit score. All you have to do is pay your EMIs on time. Your credit score will start improving if you don’t skip your EMIs or pay them after their due date.
However, if you don’t pay your personal loan EMIs on time, you will face a wide variety of problems ranging from a lower CIBIL score to serious difficulty in acquiring the next loan, apart from the fact that lender can take legal action against you.
What documents should be returned to you after you have repaid your Personal Loan?
After you repay your loan, you should remember to ask for the following documents:
- Original contract
- Letter of guarantor (in case you have opted for a secured personal loan)
- Certificate of closure or No Objection Certificate (NOC)
Are you looking for a personal loan to tide over your financial constraints? Look no further than Bajaj Finserv, an NBFC that offers various personal loans to suit your requirements. With competitive interest rates, easy online application and instant approval, Bajaj Finserv ensures that your personal loan is approved within seconds and you need funds in your account in 72 hours.
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