Personal Loan Questions

A personal loan is a loan that is unsecured (no collateral required) and can be used for virtually any purpose. Funds can be used to consolidate or repay credit card debt, make a major purchase, take a vacation or for any other lawful purpose.

Our lenders offer personal loans that range in term between 1 and 5 years.

Most banks and lenders charge a processing or origination fee between 2% and 3 %. However, some banks are flexible on this fee and may reduce or waive this amount.

The typical range that banks allow is between 30% and 40% of your annual income which can include the income of a spouse if they choose to co sign.

Our lenders offer both fixed and floating interest rate loans.

The banks can disburse funds in as little as 72 hours post approval after all of the documents have been signed.

Banks will check your CIBIL score when you apply and normally approve borrowers with a minimum score of 750.

  • Receive various offers for a wide variety personal loan types.
  • E-application saves time and allows you to compare and find the best deal for you.
  • Fill your information just once and receive multiple offers from lenders without visiting multiple banks.
  • Receive offers for products and deals from top lenders that are targeted to your unique needs.

The interest rate on a personal loan varies from one lender to another, and is also influenced by your credit rating. It can range anywhere from 10.65% to 22% per annum.

Calculating the monthly payment or EMI (Equated Monthly Instalment) is a complex job. In order to calculate the EMI, you need to be aware of the personal loan amount, the tenure of the loan in months, and the interest rate that is to be charged on the loan. These details have to be applied in the following formula to arrive at the EMI:

EMI= [P x R x (1+R) ^ N]/ (1+R) ^ N - 1]

Here, P stands for the Principal amount borrowed as loan, R for the rate of interest levied (monthly rate), N for the repayment term of the loan, otherwise called the tenure (in months).

Debt consolidation is the process by which you take a fresh loan to pay off all your existing loans so that you make a single monthly payment rather than many. Typically the new loan comes with a lower interest rate. These loans are ideal for those with several debts such as an education loan, a home loan, car loan, and/or multiple credit card balances. By taking a personal loan for debt consolidation you have the opportunity to lower your monthly financial burden while also paying off all your other debts quickly.

Your personal loan application may be rejected for one or more of the following reasons:

  • You have a poor credit history: Lenders are wary about granting loans to applicants with a poor credit. Defaulted payments, debt settlements, too many loans, and unpaid credit card balances are some of the things that lead to poor credit.
  • Insufficient income/Absence of a steady source of income: Lenders pay special attention to your income to check your repayment capacity. If you do not have a steady income, or your income is not adequate to sustain monthly payments, your application may be rejected.
  • Incomplete Documents: Lenders typically request a few documents supporting your eligibility for the loan, and your capability to repay it. Personal loans often get rejected when all the required documents are not furnished.

You can find out your credit score and get a copy of your credit report through TransUnion CIBIL, a leading credit information company. To obtain your credit score and report from CIBIL, you need to register and apply through their website. However, you need to pay a subscription fee to get access to this information.

Personal loans can be closed by paying the EMI throughout the tenure, or by pre-closure. Based on the type, personal loan closure can be categorized as:

  • Pre Closure:  Where you pay the balance loan amount before the completion of the tenure and obtain a closure statement from the bank.
  • Regular Closure:  This involves closing the loan by paying the predetermined EMI for the actual tenure of the loan. Once the tenure is successfully completed, the bank issues a loan closure statement.
  • Settlement Closure:  If you are unable to pay the monthly instalments and have defaulted payments, the bank may have to write-off your loan balance or settle it for an amount lower than what is owed. This is also referred to as bad closure. When borrowers are bankrupt or do not have the means to repay the loan, this option may be used. However, this has a drastic effect on your credit rating and affects your borrowing capability in the future.

Business Loan Questions

You can avail loan from Rs. 50,000 to Rs. 75,00,000 depending on your income repayment capacity.

The business loan tenure ranges between 12 months to 36 months.

In most of the cases, no security or collateral is required for business loans. One need to provide the relevant documents to support the application.

You will have to apply for business loan with an online application which takes few minutes. Funding or disbursement is possible in as quick as two days once your documents are approved.

You can apply for business loans for any of the purposes listed below:

  • Small business finance
  • Meet working capital requirement
  • Business Expansion
  • Update latest technology
  • Hiring new staff
  • Real estate
  • Marketing and Advertising
  • Education and Training

Processing fee varies from bank to bank and also it depends on the amount of loan sanctioned.

You can apply for business loans for any of the purposes listed below:

  • Receive quick, customized and competitive quotes/rates in one place
  • Choose the right offer for you from a wide array of lenders
  • Go paperless and save time by applying online
  • No need to visit multiple banks to secure multiple offers
  • Fill your information just once and receive multiple offers from lenders
  • Receive offers for products and deals from top lenders that are targeted to your unique needs

Home Loan Questions

Even though the process is online, the borrower will have to visit the lending bank branch at least once to meet the formal requirements.

Banks traditionally have provided 80% of the cost of the home. However, many of our lenders have special programs that require as little as 10% in down payment at the time of purchase.

Yes, you may repay the loan anytime. Some banks charge prepayment penalties that are outlined in the loan agreements. We help you sort all of this out while choosing a loan.

Once your application is submitted, approval normally takes between 10 and 30 days.

Yes, both principal and interest payments have tax benefits per section 24(1). Refer to your tax accountant for details.

Home loans normally require collateral including the papers (title) of the home and any fixed deposit schemes or insurance schemes that are listed in the borrower’s name.

You may change the interest rate characterization of your loan post issuance. Some banks charge fees for doing so. Consult your bank or lender regarding their policy.

  • Receive quick, customized and competitive quotes/rates in one place
  • Choose the right offer for you from a wide array of lenders
  • Go paperless and save time by applying online
  • No need to visit multiple banks to secure multiple offers
  • Fill your information just once and receive multiple offers from lenders
  • Receive offers for products and deals from top lenders that are targeted to your unique needs
  • Check if you meet the eligibility criteria of age, employment, income, etc.
  • Be ready to demonstrate your repayment capability with supporting documents.
  • Build a good credit history before applying. Poor credit score can minimize the chances of your loan being approved.
  • Talk to multiple lenders and choose one that best suits your requirements.
  • If your individual income is low, try co-applying with your spouse or family member.

Yes. Even non-salaried, self-employed individuals are eligible for home loans. To qualify easily, you should be able to provide adequate proof of income, and documentation supporting your financial strength and ability to repay the amount.

EMI stands for equated monthly installment. It refers to the monthly payment that has to be made to the lender to fully repay the loan within a predetermined time period. EMI includes contributions towards both the interest and principal portions of the loan. Typically, a major portion of the EMI goes towards the interest component during the initial stages. However, in the course of the repayment tenure, contribution towards interest repayment gradually reduces and the contribution towards the principal component increases.

EMI calculators are now a common online feature on the websites of most lenders. However, to manually derive the EMI, you need to apply the principal amount, tenure, and rate of interest in the traditional mathematical formula used for calculating EMI, which is as follows:

EMI = [P x R x (1+R) ^N] / [(1+R) ^N-1]

Here, P stands for the Principal Amount, R for the Rate of Interest per month (which is, Interest rate per annum/ (12x100), and N refers to the number of monthly installments.

According to RBI guidelines, the Marginal Cost of Lending Rate (MCLR) is the method that should be used by banks to determine the interest rate on home loans. For floating rates, banks adjust the rate annually or bi-annually according to prevailing interest rates.

Besides this, economic conditions such as demand for credit, inflation, etc., and at the individual level, the applicant’s risk profile and credit score are some other factors that affect the interest rate on home loans.

A prepayment penalty refers to the fee that a lender charges if you want to repay the loan amount before the completion of the term. This is done because when borrowers choose to repay the amount before the end of the actual term, the lenders lose out on a large amount of interest they would have otherwise earned. To compensate for this loss, prepayment penalties are charged by some lenders.

Not every application for a home loan gets approved. Here are some of the common reasons for rejection

  • You do not have stable employment or your income is not sufficient to sustain monthly payments
  • You have a poor credit score or there are serious issues such as defaulted payments or debt settlements in your credit history
  • You provided incomplete documentation or declared false information at the time of applying
  • The builder of the property is not approved
  • The property itself is unapproved
  • You do not meet the age requirement for the loan

To avoid rejection of your home loan application, and to improve the chances of approval, here are a few measures you can take:

  • Maintain a healthy credit (CIBIL) score
  • If you are the guarantor of any loans, make sure the repayments are being made on time
  • Avoid frequent job changes
  • Keep the required documents ready for verification
  • Understand the loan eligibility criteria and check if you meet them.
  • Reduce other obligations. In other words, do not take too many loans
  • Identify a property that is pre-approved by the lender
  • Maintain a clean banking record showing good balance, free of cheque bounces

Typically, the repayment period begins as soon as the entire home loan amount is disbursed. However, for properties that are under construction, most lenders provide the option to go for a moratorium period. This refers to the time period when the borrower need not pay the EMI, but is required to pay the pre-EMI interest alone. This period may range between 36-60 months.

Yes, you can decide the tenure of your loan based on your requirements. However, before deciding the tenure, you should carefully consider factors such as your age and income because they significantly influence your capacity to repay the loan.

This would depend on whether your income can take the weight of another EMI. Typically, if you have a smaller loan for which the monthly payment is not very high, and in addition to it you can afford the EMI of a home loan, lenders may still approve your loan. However, if your liabilities are high, and if your income cannot support another loan, chances are that your application will be rejected.

Yes, if you are already paying a high rate of interest on your home loan, your prepayment penalty may be waived by the lender.

Yes, you can jointly apply for a loan, and in such a case both your incomes will be taken into account thereby increasing the quantum of your loan. Besides this, another advantage of co-borrowing home loan is that both spouses can claim tax deductions under Section 24 of the Income Tax Act against interest repaid, and under Section 80C against principal repaid.

Yes, NRIs are eligible for home loan in India. A number of leading lenders offer tailor-made home loan schemes for NRIs with exclusive interest rates and certain special terms and conditions.

An NRI applicant should have a valid Indian passport and should be a person of Indian origin. Besides this, they should be employed, with a minimum job experience of 2 years.

A maximum of 6 borrowers can apply for a home loan jointly. However, these co-applicants have to be immediate family members such as parents, siblings, or spouse.

Comparing home loans from different lenders is crucial before you decide which lender to borrow from. By applying for a home loan through FinMarket.in, you can not only compare home loans from lenders both in the private and public sector, but also get the best home loan offers from multiple lenders.

Some expenses related to the purchase of a home, such as the initial down payment, transfer or registration charges, stamp duty etc. are not covered by a home loan.

This refers to a service offered by lenders, that allows prospective applicants to find out particulars about their eligibility for a home loan even before they decide to purchase a home. Loan pre-approvals may be used by borrowers to demonstrate eligibility to home sellers.

Loan Against Property Questions

Loan against Property is a loan given or disbursed against the mortgage of property. The loan is given as a certain percentage of the property's market value.

You can avail the loan against the following properties:

  • Commercial Property
  • Residential Property
  • Plot
  • Lease Rental Discounting

Once your application is submitted, approval normally takes between 10 and 30 days.

The value of the property would be determined through a valuation conducted by the Loan Provider.

The difference between a Home Loan and a Loan against Property is that a Home Loan is taken only for the purpose of buying a residential property whereas a Loan against Property can be taken for any purpose.

Yes the property has to be insured against fire, flood, earthquakes and other appropriate hazards during the tenor of the loan.

Yes, you may repay the loan anytime. Some banks charge prepayment penalties that are outlined in the loan agreements. We help you sort all of this out while choosing a loan.

Yes. NRIs can get Loan against Property from most leading lenders in India. Except for the requirement of some additional documents such as passport, visa, and work permit, the process of applying for LAP is the same for both NRI and Indian applicants.

Yes. You can apply for LAP jointly with your spouse, provided he/she is the co-owner of the property.

No, there are no tax benefits for Loan against Property. However, if the amount obtained from LAP is used for business expansion, the interest paid, documentation charges, and processing fees can be claimed as business expenses under Section 37(1) of the Income Tax Act. But, if the funds are being used for personal expenses such as a wedding, or a child’s education, no benefits can be claimed under the tax laws.

  • Ease of application:  Most lenders now process loan applications online. So borrowers need not make multiple visits to the bank.
  • Loan processing time:  Some lenders take a long time to process the loan application. This means a long wait period. So it is important to look for quicker processing time.
  • Processing fee:  This varies from one lender to another. Choosing one with a lower percentage can help save money.
  • Other charges:  It is important to check if there are any prepayment penalties or early settlement charges for the loan. While some lenders charge these penalties, there are others who don’t.

The loan amount granted for LAP would depend on the type and value of the property being pledged. However, in general most lenders provide LAP for amounts ranging from a few lakhs to 2 or 3 crores.

Some of the factors considered by lenders for sanctioning LAP are:

  • Market value of the property being pledged
  • Relevant approvals and title deeds of the property
  • Age of the property
  • Applicant’s legal ownership of the property
  • Age of the applicant
  • Number of dependents
  • Other debts and liabilities of the applicant
  • Applicant’s CIBIL score and credit history
  • Financial strength of the applicant, income and repayment capability

As with any other type of loan, most lenders provide an online EMI calculator on their website, which allows you to calculate the monthly payment applicable for Loan against Property. To manually calculate the EMI, apply the following mathematical formula:

EMI = [P x R (1+R) N]/ [(1+R) N-1]

Where P is the principal amount, or the total amount of loan availed, R is the rate of interest on the loan, and N is the tenure of the loan represented in months.

Yes. You can avail LAP even if you have other existing loans provided you meet all other eligibility criteria of income, age, employment, credit score etc.

The lender conducts a formal evaluation, wherein an appraiser approved by the lender, visits your property to assess it and determine its market value.

Since LAP is a multi-purpose loan, most lenders do not require you to specify the purpose of the loan up to a certain amount. However, if the amount borrowed is beyond a particular limit, you may be asked to sign a declaration that the funds are not being used for any speculative or illegal purposes.

In general most lenders charge a processing fee of 0.5-1% for Loan against Property. Besides this, there is usually a mortgage origination fee of ₹ 5000. In the event of a foreclosure, charges are applicable at 4%, and for prepayment 2%-2.5% is charged. Besides these, cheque bounce charges, or charges for late payment of EMI may be applicable, and these charges vary from one lender to another.

Yes, interest rates of LAP are lower than those on personal loans because LAP is a type of secured loan, which means lower risk to the lender.

Four important factors that determine the interest rate offered by the lender for Loan against Property are:

  • Your individual profile, which includes your age, occupation, income, debts and other liabilities, etc.
  • Your credit history, including your credit score, past debts, and loan repayment behavior
  • The type of property you pledge as collateral
  • The repayment tenure you choose for your loan

Not all applications for LAP get approved. Some common reasons for rejection include:

  • Non-fulfillment of one or more of the eligibility criteria
  • Unstable employment
  • Insufficient income or excessive other debts and liabilities
  • Poor credit score or unsatisfactory credit history
  • Absence of required government approvals
  • Low property value

Car Loan Questions

Some lenders do provide 100% of the cost of the car. Others provide 85% of the “on road” value of the car.

Yes, many lenders allow you to repay the loan early. Some lenders require a 6 month minimum outstanding period and some have fees for early payment.

Most types of cars do qualify for financing including sport utility vehicles, sedans, and multi utility vehicles. Each lender has policies for what types of cars they will loan against.

Most lenders require the car to serve as security (collateral) and may require a guarantee from the borrower or a co applicant depending on your level of income.

  • Receive various offers for wide variety of car loans.
  • FinMarket's application saves time and allows you to compare and find best car loan for you.
  • Be informed of your EMI payment details.
  • Choose the right offer for you from a wide array of lenders.
  • No need to visit multiple banks to secure multiple offers.
  • Fill your information just once and receive multiple offers from lenders.
  • Receive offers for products and deals from top lenders that are targeted to your unique needs.

Applying for a car loan with the same bank where you have an account may help you get a quick, hassle-free approval. However, by doing this, you may miss out of some of the best deals on car loans offered by other lenders in the market. So, it is always a good idea to compare loans before choosing one. The easiest way to do this is to apply online through FinMarket.in. With a single online application, we bring you the best car loan deals from various leading lenders in India.

EMI calculators are a common feature on the websites of most lenders. This EMI calculator works in a simple way. Once you enter the details of your car loan, including the loan amount, interest rate, and tenure, it calculates the EMI in a matter of seconds. However, to manually derive the EMI, you need to apply the principal amount, tenure, and rate of interest in the traditional mathematical formula used for calculating EMI, which is as follows:

EMI = [P x R x (1+R) ^N] / [(1+R) ^N-1]

Here, P stands for the Principal Amount, R for the Rate of Interest per month (which is, Interest rate per annum/ (12x100), and N refers to the number of monthly installments.

You do not need a guarantor for car loans unless you fail to meet any of the eligibility criteria such as the age, income or credit score requirement.

No. Car loans do not bring any tax benefits. Unlike home loans, car loans are not eligible for rebates. So always remember not to exceed your requirement while taking a car loan.

If you have had a good repayment history with the lender for your past loans, then you may be able to leverage your prior relationship as well as your good credit score to negotiate and get a car loan at a lower interest rate.

There are two ways in which you can close out your car loan:

  • By paying the EMI regularly, throughout your full loan tenure
  • By paying the outstanding amount all at once and closing out the loan. If you choose to do this, be aware that you may have to pay a certain percentage as prepayment penalty to your lender.

More importantly, remember that paying off the due amount does not complete the process of closing a car loan. You should also obtain a No Due Certificate from the lender. When you buy a car on loan, the car is hypothecated (pledged as security) to the lender. Once the loan is paid off, this hypothecation has to be cancelled, for which you should approach the Regional Transport Office (RTO) and produce the No Due Certificate from the lender. Following this, your RC book is updated by removing the hypothecation.

Your car loan application may be rejected for one or many of the following reasons:

  • Poor credit score
  • Defaulted payments in the past
  • Multiple loan rejections in the past
  • Insufficient income
  • Inability to produce any of the requested documents
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