What is a personal loan?
A personal loan is a loan taken by an individual to fund any personal expense like, for example, a wedding, to make renovations to the home or even for a vacation. Unlike many other kinds of loan, there is no restriction on how the borrowed amount is finally used – the borrower has full freedom to use the money for any purpose they want.
How Do I Pay My EMIs?
Your monthly EMI’s will be deducted from your salary account as per your ECS and NACH.
Are There Any Additional Fees And Charges Applicable?
We will be charging you the following extra fees!
- Processing fee charged will be upto 2%
- Late payment charges in case of default only.
What Are The Penalties Levied For Non Payment Of EMI?
Late payment charges/bounce charges will be levied as per the rates and penalties mentioned in the sanction/welcome letter. We would hence recommend that you don’t default on EMI payments.
What Tenures Are Allowed For The Loan?
The loan tenures are between 12-60 months.
When should I choose a personal loan?
If you need money quickly and for a relatively short term, then a personal loan is a good option. The loan disbursal can be relatively quicker than for most other loans since you do not have to provide documentation for the purpose the loan amount will be used for. For a home loan, for example, you need to get the legal documents pertaining to the title deed of the property, all the required government approvals and other supporting documentation. Since you are free to use the personal loan for any purpose, this end-use documentation is not required.
If you do not have any assets to pledge as collateral for a loan, then a personal loan might be a good option. In order to safeguard their money, lenders will instead study your credit and repayment history to judge if you are a low-risk customer and decide whether to approve your application.
My credit score is below 750. Will I get a personal loan?
There is no guarantee that you will be approved for a loan at any particular score. However your chances of being approved are significantly higher if you have a score above 750. At the same time, a score that is marginally below 750 does not necessarily mean that your application will be rejected. Below are some probable outcomes of your personal loan application:
If your score is between:
300-599 – You will not qualify for a personal loan. A low score in this region is a warning signal to lenders that you do not have a history of good credit behaviour. Most lenders will reject your application right away. It is necessary to take immediate steps to rebuild your credit health and improve your score to a level where you become eligible for a loan.
600-749 – Though it is not a high score, you might have a chance of being approved by some lenders. They might be willing to look at other factors that will impact your repayment ability in the future like the stability of your employment, your annual salary, the extent of your other liabilities. If they think you have the ability to fulfill your repayment burden despite your score, your application has a chance of being approved. It is, however, advisable to improve your score to 750 if you are planning to apply for a personal loan. Moreover, you should raise your score before you apply for the loan so that you can avail of more attractive terms and conditions that are extended to customers with a good credit score
750 and above – You have a good chance of obtaining a loan with such a score. There are several other advantages to a high score: the approval process will be much faster; the loan amount might be larger; and you might be able to negotiate a lower interest rate. The whole loan approval process is much simpler when you have a high credit score.
What are the advantages and disadvantages of a personal loan?
The advantages of a personal loan are that they are relatively quick (because they do not require as much documentation as a home or auto loan); there is no restriction on how you can spend the money; personal loans do not require any collateral. So if you do not have any assets like a home, or shares or gold to offer as security, and are in need of money urgently, this is perhaps the most convenient option.
The main disadvantage of a personal loan is the higher interest rate, when compared to other loans. Since the lenders do not have any security against payment default, they charge high interest rates to cover their lending risk. Personal loans can work out to be one of the most expensive loans to take in terms of interest payments.
When should I opt for a personal loan?
If you are in immediate need of money and do not have any asset to use as collateral, then a personal loan might be the best option. However, it is important to keep in mind that you will be paying high interest rate charges on this kind of loan, so you should be have a plan for being able to make all your repayments on time. Also make sure that you have an adequate credit score before you apply for a personal loan. If your application is rejected because of a low credit score, your score will drop even further with each rejection, making it even more difficult to access credit in the future.
Can I Add A Co-Applicant?
Yes, a co-applicant can be added in order to get a better credit score and avail of a larger loan amount. The co-applicant form is found in the application form. We thus urge you to think twice before you choose your co-applicant.