A personal loan is a type of loan that can be used for any kind of personal spending. These are unsecured loans provided by banks and other non-banking financial companies (NBFCs). An individual’s credit rating, income, employment history, and repayment capability are some of the eligibility criteria considered by lenders when approving a personal loan.
Unlike a car or home loan, personal loans are not secured against an asset and therefore do not require collateral. So availing a personal loan is easier if you meet the eligibility requirements. Besides, a personal loan helps you overcome any financial shortfall you may experience in your day-to-day life, including emergency medical expenses, wedding expenditure, and expenses related to education.
More importantly, personal loans are a better alternative to spending on credit cards. While credit cards put you in an on-going cycle of debts, personal loans are characterized by a predetermined repayment schedule, which gives you better control over your finances.
Personal loans are a popular choice for consumers who need to access funds for a variety of different purposes. From covering a major purchase to starting a business, a personal loan through FinMarket can help you quickly access the funds you need.
FinMarket includes top lenders offering personal loans and offers one easy platform to receive customized offers.
Whichever lender you choose to borrow from, a personal loan comes with some common features and benefits:
While you may be opting for a personal loan to meet your unforeseen financial needs, it is important not to make a hasty choice. The interest rates, fees and other charges for taking a personal loan vary from one lender to another. So, always compare loans from different lenders and pick one that best suits your needs without having to pay many hidden costs or high charges. Here are the aspects that you need to compare:
Compare the annual rates of interest charged by different lenders. This way you will know which bank offers the lowest rate for the same loan amount and repayment term.
The interest is not the only extra cost you pay for a loan. There may be many other charges such as processing fees, service charges and late payment charges. Take these charges into account while comparing personal loans from different lenders.
You need to check whether the personal loan you choose has repayment flexibility. Some lenders may charge a full or partial repayment penalty. But some banks have no prepayment charges. Choosing one such bank/lender for your personal loan may prove beneficial, especially if you think there is a chance you will repay the loan early.
Estimate and compare the EMI for the loan amount from different lenders. This will help you understand the financial commitment that will bind you, and give you an idea of how much you will be paying each month.
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Loan approval relies, to a large extent, on the documentation you provide. If you can support your loan application with the required documents, getting an approval becomes much easier. Here is a list of documents needed to apply for a personal loan:
All residents of India with a minimum age of 21 and maximum of 60 years are eligible for a personal loan. This includes salaried employees of Public and Private Limited companies, Multi-National Corporations, and Government Sector employees, Self-Employed Professionals such as doctors, lawyers etc., and other self-employed individuals. The other criteria for personal loan eligibility include:
The eligibility amount for personal loans varies according to the individual’s income and repayment capacity. For example:
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.
No, FinMarket’s service is free.
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.
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:
With most lenders providing online services, you can now track your loan application status by visiting the bank/lender’s official website. You don’t have to worry about physically visiting the bank or waiting to know the status. You merely need to register on the lender’s website, and create a login ID and password. Once you have done this, all you need is your loan application/reference number, your PAN number, and your mobile number to track your loan status online, all from the comfort of your home.
Applying for a loan through FinMarket is a simple process. All you need to do is fill in the requested information on our online application form and click ‘Submit’. Based on your requirements we bring you customized offers and products to choose from. Once you select the product and provide the necessary documents, our lenders approve your loan and the funds are disbursed directly to your bank account.