A personal loan is an unsecured type of loan that does not require providing any security or collateral. This is the reason why interest rates are charged by banks on personal loans.
It is an instant loan that is helpful for you when you need urgent funds to meet your needs. In this post, we will cover some things you should know about personal loans.
Personal loans
Personal loans permit you to borrow money to pay for expenses and repay the fund with time. It is a type of instalment debt that permits you to obtain a lump funding amount. You can use a personal loan to cover the
- Medical bills
- Moving expenses
- Wedding expenses
- Vacation costs
- Home renovation or repair
- Debt consolidation, etc
Relevant things to know about personal loans.
1. Know the bank from where you avail of personal loans.
When you approach your friends, relatives, or family to avail of a personal loan, the banks provide you with personal loans in- a tap and structured way. Along with different banks, the banks provide you with instant personal loans when you required them.
2. What is floating and fixed interest rates?
While taking a personal loan, you should check with the lender if the interest rate provided on it is fixed or floating. If the personal loan interest rate is fixed, then changes in banks do not affect the EMI amount.
3. What is the minimum and maximum personal loan amount you avail?
The minimum and maximum personal loan amounts you can take differ from bank to bank. You can get personal loans from Rs 75,000 to 25 lakh from various banks.
Also, the issuance of loans for salaried employees is of great amount than personal loans for self-employed people.
4. Tenure at which you avail a personal loan.
A personal loan is provided to people for a maximum of five years by lending financial institutions. However, the tenure for a personal loan differs from one bank to another.
5. What charges are associated with a personal loan?
When you get a personal loan, the banks or lender possess some charges like processing fees, stamp duty, other charges, etc. The personal loan charges differ from one lender to lender.
Again, the lender may also possess the pre-closure or pre-payment charges. So, before availing of your personal loan from a lender, you should check print for different types of charges levied on it.
6. Eligibility for a personal loan
The eligibility for a personal loan also differs from one lender to another. Here are the following requirements you need to meet to become eligible for a personal loan.
- Your credit should be above the pre-set level.
- Your minimum monthly income must be Rs 15,000
- Your credit score is acted important role to determines your eligibility to get the interest rate and personal loan you charge.
Conclusion
While taking personal loans, you should be considered all the above factors. By knowing the above factors, you can get personal loans at low-interest rates.