Personal Loans

Questions to Ask Your Lender Before Taking a Personal Loan

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Personal loans are convenient to undertake and require minimal documentation. But before jumping into it, it is important to ask your lenders a few questions to ensure that this is the right choice for your financial well-being. Here is a lists of few important questions to Ask Your Lender Before taking a Personal Loan.

Questions to Ask for Lender:

  • The interest rate largely influences the affordability of a loan. It is important to ask all shortlisted vendors what their interest rate is. Even a difference of 1%-2% can save you a lot of money under long term loans.
  • If you have assets that you can pledge, then asking the lender whether a secured loan would save money or not is a good idea. If yes, you can decide whether you want to take up a secured loan or not.
  • Extra charges are often overlooked as they are mentioned in the fine print of the documents. You must ensure you ask about them. They may include prepayment charges and other fees. These, in addition to personal loan interest rates, can amount to quite a lot of money.

Making a financial decision is a big deal, and it is important to ensure that you ask as many questions as you can. Holding onto questions because you do not think they are important is not a risk you should take. No matter how small, clarify all your doubts to avoid a financial burden on yourself in the future. 

Having a complete understanding of your loan enables you to pay off your debt much sooner. Get started now and find a lender that offers competitive interest rates and full transparency!

Must Read: Get a Fullerton India Contactless Personal Loan Completely Online

Get a Personal Loan in 4 Steps

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In times of financial emergency, instant personal loans can be handy and beneficial for you. The advent of instant personal loans further eases this since these loans are speedy, as the name suggests. The following are the 4 steps involved in availing one.

4 Steps to Get a Personal Loan:

  • Application 

The first step of the process is requesting an online personal loan application form. After receiving the form, it is essential to accurately fill in all the details to prevent rejection of your application. Checking your eligibility with an online calculator before this step ensures a more speedy process.

  • Documentation

To avoid a longer sanction period, make sure you submit all the required documents punctually and adequately. Different lenders can ask for different documents, but address, identity, and income or employment proof are the main requirements.

  • Verification 

After all the documents have been uploaded, the lender cross-checks and evaluates what you have uploaded. They also check your credit score and history, which are critical factors determining whether you are eligible for low interest personal loans.

  • Signing and Disbursal 

Once the verification is complete, you are handed the agreement papers. Once you sign them, the amount is disbursed into your account in 24 hours. You can then use your newly acquired personal loan however you please!

Fullerton India aims to make getting a personal loan as hassle-free as possible. Our instant approvals and on-site calculators help you calculate eligibility, loan amount, and EMI before your application process, promoting better financial planning during this process. 

Additional Read: Here is how a Personal Loan Online Better Than offline process

How can one Get an Instant Loan Online?

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Personal loans online have made it a quicker and hassle-free option to get instant loan sanctions for anyone looking for urgent money. These loans do not require any collateral, and hence they are credited almost instantly. Additionally, these loans require less paperwork as the process is digital.

The instant personal loan process your documents quickly and grant you the personal loan within 24 hours. Additionally, the loans availed through the instant loan apps get you the loan up to 25,000 on the go. Many lenders offer low-interest personal loans through their quick loan apps.

How Can One Get an Instant Loan Online?

  • Checking their eligibility through the lender’s website.
  • Calculate your monthly EMI instalments using the EMI calculator
  • By installing a personal loan app and filling out the application form
  • Uploading the necessary documents requested by the lender
  • Photo
  • ID proof
  • Address proof
  • Salary statement 
  • Bank statements
  • Click Submit

Talk to the customer care representative to discuss further information while the application goes through the verification process.

If sanctioned, the amount will be credited to you within 30 minutes of loan approval.

Lenders offers low interest personal loans that start at 11.99%. If eligible, one can avail of a personal loan up to ₹25 lakhs if a salaried employee. Additionally, one can opt for flexible repayment tenures until five years and choose their flexible monthly instalments using the Fullerton India EMI calculator. Install the Fullerton Insta Loan app today to avail exciting benefits.

Must Read: Get a Fullerton India contactless personal loan completely online

Milestones You Can Reach with Personal Loans

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A personal loan is a collateral-free loan that helps you meet financial needs. Under this, borrowers get the flexibility to decide what they want to use their loan for. As a result, instant personal loans can help you reach a particular milestone in your life. These milestones include: 

Milestones You Can Reach with Personal Loans:

  • Higher Education

Quality education is an investment, but student loans can have very high interest rates, often resulting in premature debt. Instead, you can get a personal loan to finance your higher education, as it is an excellent alternative to student loans. 

  • Wedding Expenses 

Having your dream wedding can be quite cost-inducing. To avoid compromising on your desires for this special day, couples can take personal loans to fund wedding expenses.

  • Debt Consolidation

For those with various debts, it is challenging to pay to different sources with different interest rates. Borrowers can take a personal loan for this. It makes repayment hassle-free and can even be cost-effective. To estimate whether this will be more cost-effective, you can use a personal loan EMI calculator. 

  • Home Renovation 

Home renovation is quite an expense and needs a pool of liquid cash to fund it. Unfortunately, many people do not have all the funds available. A personal loan can help you overcome this challenge and pay for the costs in comfortable instalments. 

Lenders believes in helping you meet every important milestone in your life. Avail of our loan services for flexible repayment schedules and competitive interest rates that keep you financially stress-free during the loan experience!

Additional Read: How Does A Personal Loan Balance Transfer Work?

Things to Consider When Taking a Personal Loan

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With a surplus of loans available today, not all lenders are trustworthy. This requires borrowers to pay close attention to the terms of the loan to steer clear of any repercussions. 

The following are a few things to take into consideration when taking a loan:

High Origination Fees

When borrowers try to finance a personal loan, some lenders might charge an origination fee. While this is not out of the ordinary, borrowers must be wary of how high this fee is. Having an origination fee that sums up a large percentage of the loan amount is a red flag that customers should watch out for. 

Short Repayment Span

While it is advised to repay loans as soon as possible, tight repayment deadlines are not ideal. Often, borrowers can face a financial crunch that sets them back. As a result of these deadlines, you can fall into the trap of more debt, with the repayment default reflecting poorly on your credit score. 

High Repayment Penalties

Early repayment penalties are there to protect lenders from losing interest rate profits. While these penalties are not usually a hefty amount, some are. High penalties can hinder a customer’s ability to be debt-free sooner. So, when you ask yourself, “How much loan can I get?” be sure to factor in these extra costs. 

A trusted lender’s wants you to have a good loan experience and feel financially secure. Therefore, we offer loans at competitive interest rates with very flexible repayment schedules, preventing any financial burden in the process!

Must Read: How To Increase Your Personal Loan Eligibility?

How Does a Personal Loan Help Settle Previous Debt?

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People often have multiple channels of financing, including loans and debt. Handling all of them separately and making monthly payments to different channels can be an inconvenience. Undertaking a personal loan to settle other debts can be a much-needed relief for many. The steps to taking this loan are also exceedingly simple today, as long as you meet the eligibility requirements.

You can express what tenure, monthly EMI, and the loan amount you are looking for during your personal loan application. Clients base these desires on their income, expenditure, and repayment capacity. Accordingly, the lender will let you know whether your request needs tweaking, and the two parties can come to a common ground. 

Potential borrowers can use the EMI calculator to get a reasonable estimate of the loan and interest rates. Such calculators also help them financially plan and be prepared for the various payments they need to make. This further allows them to approximate how long it will take them to settle their debt, helping them decide the appropriate tenure for a better loan experience. 

Lenders offers personal loans at competitive interest rates and a flexible repayment period. Annually, personal loan interest rates are roughly 18%. On the contrary, credit card interests are 24-36%/year. Taking a personal loan makes the repayment of debt much more cost-effective. You can comfortably pay it off between the span of 6-60 months. After crossing the 6-month mark, you can foreclose the loan without prepayment penalties.

Must Read: How to manage a Financial Crisis During Coronavirus (COVID-19)

How To Manage a Personal Loan?

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Before taking any loan it is imperative to learn how to manage it. Otherwise, you can land in a debt trap and have lenders harassing you for repayments. But managing a instant personal loan is relatively easier. Here are a few things you can do to successfully manage your personal loan and ensure that you have a smooth loan experience during your tenure.

Tips to Manage a Personal Loan:

  1. Pay your EMIs before making any other payments every month: This is the most important tip to manage a personal loan. Most people forget their EMIs and end up defaulting on payments. This could invite charges and legal action from the lender, which can ruin your credit score in the long run. It is best to use a personal loan EMI calculator before taking a loan to understand your monthly obligations.

  2. Keep a track of the different types of loans you have taken: If you have taken more than one loan, keep a track of them separately so as to avoid confusion at the time of making repayments. The best way is to make separate bills for each loan and prioritise payments accordingly.

  3. Borrow only the amount required: Never go beyond your financial requirement by borrowing more than required. Interest rates are higher for personal loans as compared to other loans, so borrowing a higher amount will lead to a bigger expenditure and pressure on your budget. Always try to keep a saving fund for unexpected emergencies that might force you to borrow money in the future.

Keep the above tips in mind to manage your personal loan effectively.

Additional Read: How to get a Fullerton India Personal Loan? – Step by Step Guide

How to Apply for a Digital Personal Loan?

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The internet is a good place to look for information or to make small purchases. Unsecured personal loans are readily available on the web, and applying for them online leaves out the need to visit any bank branches. Many lenders offer this service as they recognize the convenience it offers, but also because it makes sense from their perspective too.

Here are Two Ways in which you can Apply for a Personal Loan:

  • Online application through lenders’ websites: This is the most convenient way to apply for a personal loan. It requires you to fill in an online application form and submit it with the required documents. This approach saves you the hassle of having to visit branches and applying physically. Most lenders, such as Fullerton India, offer an end-to-end digital process. From application to disbursal, everything can be done online. Lenders also offer tools such as personal loan EMI or interest rate calculator and personal loan eligibility calculator to make things easier for borrowers.

  • Personal Loan Apps: In a move to make personal loans available to everyone, lenders offer instant personal loans through mobile applications. You can check your eligibility, fill an application, submit your documents, and track the application from the convenience of your phone. Some of the apps also help you get personalised loan offers from various lenders on one platform.

Personal loans are now available anytime and anywhere to fuel your needs. Check out the best personal loan offers on various parameters like interest rates, tenure, and other fees to make an informed decision.

Must Read: How to get a Fullerton India Personal Loan? – Step by Step Guide

How to Get a Personal Loan with a Low CIBIL Score?

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A personal loan refers to the amount of money that you can borrow from financial lenders for a variety of purposes, like paying off debts, meeting wedding expenses, or going on a vacation. It is very easy to get a personal loan, provided you meet the eligibility criteria set by lenders. 

Meeting the rules and regulations of the lender is very important, as they have the key to unlock your loan. Before approving a personal loan, lenders verify many things and you need to go through all the checkpoints to get the funds sanctioned. One of the most important things is to have a high CIBIL score. Do you need personal loan with bad CIBIL score? Can you still get it approved? Read on to understand how to get a personal loan with a low CIBIL score. 

How to Get a Personal Loan with a Low CIBIL Score:

  • Income Evidence for Loan Repayment

Income evidence like bank statements or salary slips can make the process of getting a loan without a high CIBIL Score hassle-free. While submitting your personal loan application to the lender, attach all your income evidence documents, which will assure the lender of your repayment abilities in spite of poor CIBIL score.

  • Get a Guarantor

If you have a low credit score, then you can opt for a guarantor with a good credit score. If the guarantor agrees, then the lender can approve your personal loan. 

  • Low Personal Loan Amount

If you request the lender for a high amount of personal loan with a low CIBIL Score, then it’s not likely to be approved. This is because lenders doubt the repayment abilities of a borrower with a low credit score. However, if the loan amount is low, then you can convince the lender to provide you a loan. 

Once your loan is approved even if your credit score is low, ensure that you pay it back promptly so that your CIBIL score improves. This way, it would be easier to get your next loan approval. 

Must Read: Does credit score affect to your personal loan application?

Situations In Which You Can Take a Personal Loan

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Personal loans come in handy in multiple situations. As it is unsecured loan and collateral free, this is the reason for its popularity. Here are a few instances where taking quick personal loans might turn out to be beneficial: 

Medical emergencies 

If your medical insurance fails for some reason, or you don’t have money to pay for your or a loved one’s treatment, personal loans can come in handy. They are disbursed extremely quickly when taken from NBFCs, and it would be easy to pay off the EMIs over the next few months. Additionally, it also ensures that the people you care about get the medical treatment that they deserve. 

Holidays

Everyone has got a dream holiday destination they yearn to visit one day. This can be Nigeria, France, Spain, Singapore, or even Disney World! Taking a personal loan if you would be unable to pay for the vacation out-of-pocket would be a good choice. You can get funds up to 25 lakhs, and the EMI payment makes it easy to return the money after your travels. 

Business

If you have faith in a business idea and are confident that it will serve you well, don’t hesitate before taking a personal loan for it. This helps you finance this idea of yours in a relatively stress-free environment, focusing more on your work. When your business takes off, you can repay the loan at the earliest to avoid further expenditures on interest. 

Weddings

The potentially most important day in your life could be made magical by taking a personal loan for it. You can ensure that you have the products and services of the highest tier and make it a night that none of your guests would be able to forget. 

Have your personal loan documents handy– they can come to good use. 

Additional Read: How to Select Right Type of Personal Loan for Yourself?

3 Benefits of Personal Loans

Personal loans are a form of quick loan which can be used for any purpose such as paying for weddings, holidays or starting a business. Here are some benefits of applying for a personal loan: 

Rapid disbursal / Quick disbursal of funds

A lot of online vendors disburse loans within 24 hours of receiving a request. This rapid disbursal is ideal if you have an urgent need for funds, or if you’re facing an emergency. 

Must Read: What Are Short Term Personal Loans?

No collateral required 

Since personal loans are mostly unsecured, you do not need to pledge any of your assets. This helps in making personal loans accessible to everyone. 

Fewer documents needed / Hassle-free Documentation 

Applying for a personal loan online is a wholly paperless process – all documentation happens online. Here are the documents you may need, depending upon the financial institution you are applying from: 

  • Loan application: To provide details on the loan, such as the amount required and the purpose of the loan, amongst others.  
  • Identity proof: Any proof of identity that has been provided to you by the government.
  • Proof of address: This might overlap with identity proof, and it includes proof of home or the lease agreement. 
  • Employment proof: If you’re employed, lenders need this to verify your payback abilities.
  • Income tax returns. 

Using a personal loan calculator may be of assistance. It helps you estimate the sum of money you will need to pay in each EMI installation, which will no doubt help in planning your finances better.

What Are Short Term Personal Loans?

Financial emergencies do not come informed. You will fall into deep trouble if you do not have enough savings or investments. Short term personal loans can save you in such situations.

These days, financial institutions offer small instant loans. Anyone with a regular income source can avail these loans. They will help you overcome your crisis with instant money. Let us take a look at some of their advantages.

Benefits Of Short Term Loans

  1. Lower Interest Payments

You have to pay off short-term loans within a short period. So, the interest amount is quite less compared to other loans.

  1. Lesser Waiting Time

You cannot afford to wait for funds during emergencies. Lenders process short-term loans immediately to help you during a crisis.

  1. Lesser Requirements

Don’t you have a decent credit score? There is no reason to worry. Short-term loans do not have strict requirements like other loans.

  1. They Can Boost Your Credit Score

You have to repay these loans within a year. Repaying them on time will give a great boost to your credit score. It will  help you to get long term loans in future.

Are you thinking about the interest rates? Well, they are much lower than personal loan rates. Short-term loan interest rates usually range from 9.2 to 9.5%.

Fullerton India provides affordable short-term loans to deal with emergencies. You do not have to go anywhere. Apply online and get instant approval. So, why are you still waiting? Take a short-term loan from Fullerton India and handle your crisis like a pro.

Must Read: GET FULLERTON INDIA DIGITAL INSTANT LOAN IN 2 CLICKS AT HOME

What is the Income Tax Benefits on Personal loan?

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A personal loan is also referred to as unsecured loans as they do not require any collateral and easily available to all for financial emergencies. While a personal loan can be your saviour during a cash crunch, let us learn its benefits on income tax. 

Is a Personal Loan Taxable?

As a personal loan is not considered income, it is not taxable. However, it is always advisable to take a personal loan from a reputed lender to avoid any tax deduction on your loan amount. You can apply for loan here: https://www.fullertonindia.com/personal-loan.aspx

Can one avail tax benefit on personal loan?

While many of you may deny, but apart from many other benefits, personal loan online apply also helps in reducing your tax liability. This can happen if you put the loan amount to a specific end-use. As per the Income Tac Act,1961 tax benefit can be availed on personal loan if it is put to the following use: 

  1. Business Expansion

If the loan amount is being used to meet the expenses related to business expansion, which in turn will help in increasing the revenue of the business. Then you can claim a tax deduction for the interest you are paying on the personal loan.

Must Read: 5 Reasons Why Borrowers Choose Fullerton India NBFC for Personal Loans

  1. House Renovation

If the loan amount is used for home renovation or improvement, the interest paid up to Rs 30,000 can be claimed as a deduction. If the renovation is for a residential house then a deduction of up to Rs 2 Lakh is allowed for interest paid. You can use the Personal loan EMI calculator to learn your interest paid. 

  1. Purchase of other assets

If the money borrowed is used to purchase an asset like non-residential house property, gold jewellery, or shares, you can benefit from the exempted tax on the personal loan. 

 So, while the personal loan is unsecured and is not taxable, if used judiciously it can offer great tax benefits.

Additional Read: 2021 May Months Automobile Top Links

FAQs:

Is a personal loan secured or unsecured debt?

Different Ways to Calculate Your Personal Loan EMI

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A personal loan is often obtained in case of emergencies or when one is in urgent need of funds. The onset of COVID-19 has compounded such a need for many people in the country. However, before obtaining such a personal loan, it is wise to be aware of the total payment to be made over the tenure of the loan.

Such information can be calculated using the EMI which is to be paid monthly to the financial institution. The EMI along with the schedule of payment is given with each loan however, the borrower must be aware of how EMI is calculated. This will ensure that a borrower makes an informed decision.

Manual calculation of EMI

One can either set up or use a personal loan EMI calculator using an application such as Microsoft Excel. Or use one of the myriad calculators which are available online.

Firstly, let us understand how an EMI is calculated. The formula for calculation of EMI is dependent on three main factors i.e. the amount of loan taken, rate of interest as well as time to repayment. Such formula is as follows:

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

Where P = Principal

R = Rate of Interest

N = time period

Calculation in Excel:

Apart from such manual calculations, EMI can also be calculated using the financial function in excel which can provide the data instantly.

Online Calculators:

EMI can also be calculated using online calculators wherein the user has to merely enter the details regarding the loans to calculate the EMI. The user can also know different EMI by changing tenor of loan, interest rate or principle to suit their need,,

An understanding of how EMI is calculated and basic knowledge of its computation enables one to become better informed and avoid being taken for a ride. With several personal loans being sold online, a personal loan EMI calculator turns out to be a handy decision making tool.

Must Read: 5 Tips to Acquire Attractive Deals on Your Personal Loan Interest Rate

FAQs:

What personal loan lenders accept referrals for money?

Will a personal loan build more credit?

Prepaying Personal Loans – Tips You Should Keep in Mind

A personal loan is the easiest type of loan you may avail to settle off existing debt, buy a property, purchase a motor vehicle, or for any other purpose. However, the personal loan is a liability, and you need to make a robust plan to pay off the dues in time; else, the lender might impose a fine. Thankfully, you may prepay the loan without waiting until the end of the term.

Here is a laydown of the do’s and dont’s you should consider before prepaying.

The Do’s

Create a Provision for Meeting Daily Expenses

Ensure that prepaying the loan does not put any additional burden on your monthly fixed expenses. Stay cautious if you already have a personal loan or mortgage loan, as not paying the dues on time may decrease your credit score.

Use a Personal Loan EMI Calculator

Before deciding to prepay the loan, use a personal loan EMI calculator to check if you can manage a discount from another lender. Sometimes, it is better to switch to a different lender who is offering a lower interest rate than to prepay the loan.

Check the Prepayment Charges

Lenders often charge a prepayment penalty, which can partially offset the benefits of paying off the dues early. Calculate how much you are saving in real terms by prepaying. Opt for prepayment only when you feel the long-term benefits far outweigh the short-term ones.

The Don’ts

Don’t Burden your Personal Savings Account

The worst mistake that you can make is prepaying by emptying your savings account. By doing so, you can make yourself vulnerable to unpredictable emergencies. If such a need ever arises, you might have to apply for a personal loan again.

Never Discontinue or Close Existing Investments

Sometimes, you might feel like surrendering your mutual fund units, selling your stocks, or pulling out money from retirement funds is the best option. But, by doing so, you can lose the opportunity to make handsome profits. If given time, mutual funds, stocks, or retirement funds can generate higher returns than you will pay as loan dues over time.

Conclusion

Before prepaying a loan, consider all its pros and cons. There is probably nothing better than prepaying a personal loan. However, prepaying should never seem like a burden.

Must Read: Small Personal Loans: Everything You Need to Know!

Personal Loans in the Future: Digital and Paperless

The last few years have witnessed the growth of digital transactions in India. Apart from government initiatives like Digital India (which aspires to build a cashless society) and demonetisation, the emergence of several public and private platforms have made digital transactions accessible to large swathes of Indian consumers. Indian consumers use UPI, e-wallets or USSD services for making digital transactions.

Apart from spending and receiving money, Indian consumers are going paperless for other money related activities too – such as making investments and availing loans.

Getting a Personal Loan is easier than ever before

Personal loans online is not merely a distant dream but it has already become a reality. Any person armed merely with identity proof and their PAN Card can apply for personal loans online and after due verification can get instant disbursement to their bank account. The hassles of filling up a form, waiting for the bank official to pick it up, and wait for weeks for processing is history now. Financial institutions can collect the credit history of the user through their PAN card and eligibility can easily be determined.

Online Verification Process and EMI Calculation

Financial institutions with the help of e-KYC and digital signatures have made instant loans without any physical intervention a reality. The consumers can verify different rates as well as EMI from different institutions online. Such a personal loan calculator online enables the consumer to make instant decisions and negates the need to visit the office of the institution.

The financial sector has been going through a flux however a seamless transition to digital transactions will ensure high traction for the sector. Digital and paperless loans allow time-saving, resource-saving and most importantly in the current times, allows the users to maintain adequate social distancing. Personal loans online have become a reality for all users through the shift to digital mode.

Must Read: How Personal Loan Balance Transfer Helps You To Reduce EMI?

Why Should you Rely on Online Personal Loans?

In case you are tired of chasing financial institutions and representatives for a quick personal loan, try out the digital sources, at least once. A majority of online creditors offer hassle-free loan procurement services with a reliance on speed, competitive rates, and minimal downtime issues.

Therefore, if you have made up your mind about getting an instant personal loan online, consider sifting through some of their best characteristics:

  • Competitive Interest Rates

With a host of online lenders to evaluate and connect with, you can always look for the most competitive interest rates based on your personal loan eligibility.

  • Curated Offers

A majority of digital lenders keep a close eye on your search patterns, and once you feed in the necessary details for them to evaluate the credit profile and loan eligibility, they end up curating pre-approved credit lines for speeding up the procurement.

  • Paperless Process

Credible online lenders ensure that every process, starting from application to disbursement, is initiated over the concerned application or the relevant online platform. This feature saves time and is in line with your financial emergencies. 

  • No Collateral

As is the case with traditional personal loans, digital credit lines are completely unsecured and do not require any sort of collateral to approve the application.

Besides, these digital loans allow you to structure the repayment based on tenure preferences, thereby putting you in control of your finances. Not just that, almost every reliable online lender refrains from charging the hefty processing fee, mostly associated with traditional creditors.

Must Read: 6 Common Credit Score Myths You Should Stop Believing

Things To Consider Before Prepaying A Personal Loan

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If you are considering an option to pay off the personal loan before the repayment tenure, there are quite a few things that you need to consider. While the feeling of financial stability upon prepayment might be tempting enough to consider, never proceed with the same unless the following aspects are taken care of:

  • Type of Personal Loan

If you check personal loan eligibility and eligible to apply for a loan after, the thought of prepayment should focus on the interest rates, penalties on overdue payments, and foreclosure charges, if any. For instance, it is always advisable to pay off a revolving loan like a credit card to ensure debt riddance, as quickly as possible.

  • Prepayment Caveats

If your lender is known to levy heft foreclosure charges, it isn’t advisable to prepay the loan early, and that too if you are nearing the end of the tenure. However, if you have taken a long-term loan and prepayment with foreclosing penalties is more financially viable than the accumulating interests, consider paying off the loan at the earliest.

  • Payment Methods

Now that you have made up your mind about paying early consider the best method to go about the process. In most cases, individuals consider debt consolidation where they get rid of the highest interest loan with a more affordable credit line. 

However, before you can even consider an early payment, it is necessary to accumulate the documents required for a personal loan to get a better clarity into the process. 

Regardless of the approach, prepaying strategically can also improve your credit score, in the long run. 

Must Read: Re-Applying For A Personal Loan? Here are 5 Things To Consider

Multiple Personal Loans: Advantages And Disadvantages

A personal loan is a one-stop solution to all your expenses, whether they are costs related to medical emergencies, wedding expenses, house renovation, or higher education. 

The personal loan eligibility criteria can be met easily with minimal documentation with no restriction on availing multiple personal loans. 

So, before planning to avail multiple personal loans, let us have a look at the advantages and the disadvantages-

Advantages of Multiple Personal Loans-

  1. Improves Your Credit Score

If you are to repay the loans within the repayment periods, multiple personal loans can be a smart way to enhance your credit score. 

  1. Swift Response

Multiple personal loans are the best option in situations where you need to take care of multiple expenses, and you are out of finance to cover them. 

  1. Flexibility

Higher the credit scores, higher are the benefits of multiple funding sources that can help the borrower in meeting the financial requirements effortlessly.

  1. Security

If you are into a business that needs continuous funding, taking up multiple personal loans can be easily used to secure the finances of your business.

Disadvantages of Multiple Personal Loans

  1. To pay for all the monthly instalments, you will need a steady income that can accommodate all your liabilities.
  2. You need to repay the loan without any failure, or you might end up with a bad credit history.
  3. To repay multiple loans, you might need to cut down on luxury or even necessary expenses.

Conclusion 

Now that you have all the information about multiple personal loans, you can go ahead and check your eligibility using a personal loan calculator and apply for it. 

Must Read: Get a Personal Loan for Women to Boost Your Financial Profile

When are Personal Loans is a Good Idea?

Personal loans can be used for paying off your debt, large purchases, emergency expenses etc. Usually, personal loans have the format where you borrow a sum of money from any lender and agree to pay it back with an agreed-upon interest rate, within a period of two to six years. Some may find the loan frivolous, but it can be of great use if you borrow at the right time and for the right purpose.

  1. Debt consolidation – Carrying too many loans or debts with varying interest rates is a recipe for financial trouble. This is where personal loan applications can help. When you apply for a personal loan for debt consolidation, you are combining all those loans into one. This usually leads to a lower personal loan interest rate as opposed to the combination of loans you were paying. Therefore, it is also easy on your pocket.
  1. Emergency expenses – We are living through a pandemic and healthcare facilities are expensive. Therefore, if it comes to it, it is wise to take a personal loan to pay off medical bills and expenses. Similarly, in the event of any other emergency like a death or an accident, if you need quick money, personal loans are the way to go.
  2. Large purchases – Household needs do not strike as per the economy’s needs. You might need an electrical appliance, a geyser, an important fitting inside the home etc. Similarly, buying vehicles or recreational equipment might take some significant investment.

By taking a personal loan, you can enjoy ownership of the equipment and continue to pay for it side by side.

These are a few instances where you can take a personal loan, and it won’t be cumbersome on your pocket. As long as you stay on schedule and repay monthly, taking a personal loan for any of the above purposes will be a breeze.

Must Read: 5 Signs Which Indicates You Can Stuck In Personal Loan Scams

A Short Guide to Personal Loans in India

A personal loan is a small collateral-free loan taken by an individual from a bank or an NBFC. These loans do not require the borrower to state their reasons for taking the loan.

What are the Eligibility Criteria of Personal Loans?

To avail a personal loan, you need to meet a very basic eligibility criterion. It comprises of a stable income, a stable place of residence, a good credit score, age and satisfactory repayment capacity. You will have to present documents to offer as proof of all these factors when applying for a personal loan.

Loan Amount 

Three factors decide the amount of a personal loan that you are eligible for. They are your income, your debt-to-income ratio, which is your repayment capacity and your credit score. You can check your eligibility on personal loan eligibility calculators available on the websites of most lenders.

Rate of Interest

The rate of interest for personal loans is high. Since it is an unsecured loan, the interest rate begins at 8.8% per annum. But the rate of interest on your loan will be subject to your eligibility. If you have a low credit score, your rate of interest will be on the higher side.

Loan Tenure

A borrower can avail a personal loan for a maximum of 7 years. But since the interest rate of personal loans is high, it is advised to choose a shorter tenure.

How to Apply

You can apply for a personal loan by filling a simple form on the website of your chosen lender with the required documents. Personal loans are usually disbursed within hours of verification.

A personal loan is the best to fuel any urgent cash requirements.

Must Read: 5 Tips to Get a Personal Loan Without Hurting your Credit Score

How to Manage your Personal Loan?

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Due to fluctuations in the economy, interest rates and the buying behaviour, repayment of loans is made to look more challenging. Many borrowers find themselves in tricky situations where they are unable to pay the EMIs or make late payments, and it is hard on their pockets.

If you are going to personal loan apply online must know the tips for managing instant loans smartly will help you reduce credit burden and pay off your loan easily.

Tips to Manage Personal Loan:

  • Making a budget

Establishing a budget when you are repaying a loan is incredibly important. Since you are aware that you have to make monthly payments, it makes sense to allocate certain chunks of money to your monthly expenses. Rent, groceries, shopping etc. should all be accounted for at the beginning of the month. Same goes for the loan. Be sure of every payment you made and make a budget out of it too. You should have an excel sheet, where you have accounted for the processing fee for a personal loan as well.

More important than even making a budget is undoubtedly sticking to it. Sticking to what you have decided for your expenses will help you stay on top of finances and take out money for repayments also. Having a budget and sticking to it is the golden rule to repayment.

  • Set a reminder 

Setting reminders for paying your monthly EMI can be of so much help. Not only will it make your payments on time, but it will also lead to an improved credit score.

While personal loan apply online, some lenders provide the option of sending you reminders or E-mails to know when and how much is due as EMI for a specific month. If provided, choose that option. It will only help you repay on time and avoid all the late payment stress. 

Repayment of a loan is not as stressful as popular discourse has made it out to be. It can be easy and manageable in case borrowers take care of a few things.

Must Read: How to Avail Instant Personal Loan Online in India?

How to Improve Your CIBIL Score By Applying For A Personal Loan?

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The best personal loan is the one which can fulfil your needs and is also not a burden on your monthly expenses. A personal loan is repayable every month.

The amount of EMI depends on the amount of loan, and the tenure one will be selecting. You can check your eligibility for a personal loan by using a personal loan eligibility calculator. (Check Your Eligibility Here)

Personal Loan

Availing the benefits of a personal loan can affect your finance for the tenure you are selecting. So, before applying for a personal loan, one must check with different lenders to get the best personal loan possible. Listed below are some factors one should consider before applying for a personal loan.

  1. Rate of interest: The rate of interest is the most critical factor that will determine your monthly EMI’s and how much you will have to pay for a loan. So, it is advised get the best rate possible.
  1. Amount of loan and tenure: A personal loan varies from Rs. 10,000 to Rs. 75 lakhs depending upon your credit score and monthly income. You can select the period according to your ease from 12 months to 84 months.
  1. Extra fee: Many lenders charge additional fees like processing fees, prepayment charges and many more. It varies from lenders to lenders depending on the scheme you will be choosing.

Conclusion:

To get the best personal loan, it is advised to compare different lenders to get the best deal possible. Review the above factors before applying for any personal loan.

Must Read: Does Repo Rate Impact on Personal loan EMI?

Personal Loans: A Quick Guide For Salaried Employees

You can take personal loans for planned as well as unplanned expenditures of your life. It is true that it is easier for people employed with private limited firms to get personal loans, but they need to meet the eligibility criteria of the lender. 

This article is a quick guide to help you understand the basics of personal loans for self-employed.

Most lenders offer easy personal loans

Yes, it is easier to avail loans from NBFCs, but you have to make sure of the following:

  1. You have the documents as mentioned on the lender’s website
  2. You are filling the form correctly and accurately
  3. Your credit score requirement meets the minimum credit score requirement set by the lender

Salaried employees looking for a personal loan are often confused about the loan, processes involved and uses. This article gives you a quick insight and answers the common queries

What is personal loan for salaried employees?

A loan offered by lending institutions to meet the personal expenditure of salaried employees. You must earn a salary from a private limited firm or government organization. 

What is the maximum amount I am eligible for?

Usually, the maximum loan amount you can get is Rs 25 lakh, but the amount varies across lenders. Additionally, the final amount depends on your eligibility. Use a personal loan calculator to know the EMI you will pay every month. 

Is there a requirement of minimum income?

Yes, there is. Typically, if you are employed in Delhi or Mumbai, your salary should be Rs 25,000 per month minimum and for other cities, it should be Rs. 20,000 per month.  You will be asked to submit at least three months salary slips.

What are the documents required?

Here is the list of the documents required:

  1. Application form of the lender that is filled correctly and signed 
  2. Passport size photographs
  3. You have to submit the following proofs
    1. Identity (Pan Card, Driving License)
    2. Income  (Salary Statements)
    3. Age (Pan Card, Driving License, Passport)
    4. Address (Electricity Bill, Passport)

What are the other terms and conditions?

The exact tenure and interest rate would vary from lender to lender.

  • The loan tenure ranges from 12 months to 60 months
  • Annual interest rates start from 11.99% per annum

The approval of your instant personal loan will depend upon your profile and credit score. 

Additional Read: Personal Loan for Salaried Employee: Everything You Need to Know

Top Reasons Why You Should Apply for a Personal Loan

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The best part of taking a personal loan is that you can use the loan amount for any reason. While applying for a personal loan, one does not have to explicitly mention to the lender the cause of seeking the loan. Whether planned or unplanned, you may apply for a personal loan for the following reasons. 

Reasons to Apply for a Instant Personal Loan:

  • Debt consolidation: Imaging having taken multiple loans and having to pay off each of them every month. Then, there may be regular piling of credit card bills, thus, leaving you stressed under recurring financial debt. To get rid of the liability of paying off numerous bills, you may consider taking a personal loan to the tune of total financial debt incurred and then repaying all of them at one go. This will leave you with a single loan that you would be required to repay along with interest within the given loan tenure.
  • Ease of application: “For personal loans, apply here” are common advertisements that we frequently come across on the web. Credited by lenders for their customers’ use, most personal loans are unsecured loans and do not require borrowers to offer collateral as security or a guarantor to avail the loan. You may apply for a personal loan by either going to the lenders’ websites or approach the nearest branch with a loan application form. 
  • A better alternative than payday loans: Though personal loans come at high-interest rates, it is still better to avail them than opt for instant payday loans that charge one per cent interest for each day throughout the entire loan tenure. When annualized, the yearly interest rate on payday loans is a whopping 365 per cent per annum. Payday loans are easy to get but involve hefty penalty charges in case of default on payment during the loan period. However, most lending institutions do not charge extra in case of personal loan default or foreclosure. To gauge the estimated returns on a personal loan, you may use the personal loan interest rate calculator available online.
  • Paying for emergency expenses: Medical treatment is getting costlier, thus, mandating the need for personal loans. Not all people buy health insurance to cover the expenses on their medical treatment. Paying off medical bills is one of the reasons to opt for a personal loan. These medical expenses may include spending on surgeries, in addition, to pay for medications and availing aftercare facility, when required.
  • Making added investment to business: The penchant of giving shape to a business idea is common with millennials. However, any business idea, big or small, necessitates some basic investment. While business loans are available, the remaining capital requirement can be supplemented with a personal loan from your choice of lender.
  • Dream vacation: Planning a dream vacation with your loved one? Lack of funds may prove to be a hurdle. You may choose to either wait till you have saved enough or apply for a personal loan. If the need for a break is imminent, the loan amount credited to your account can help. However, it is important to estimate the amount of loan that you would require so that you do not borrow more than you require. 
  • Destination wedding: Indian weddings are synonymous with grandeur and a lot of celebration. If you have opted for a traditional wedding ceremony, get ready to participate in multiple ceremonies. Functions and observing ceremonies can be expensive. Just because a wedding is an expensive affair, it does not mean that you would postpone it for an infinite period. Statistics shared in the past reveal how a major percentage of personal loans was taken to meet marriage-related expenditure. 
  • Home remodelling: You may feel the need to refurbish your old home. Whether you are looking to replace that old roof, install solar panels or construct a new wall, remodel your kitchen or lend a whole new look to your garden area, taking a personal loan can help. Seeking loans from banks for house remodelling is a perfect solution in case you do not have the necessary cash in hand. Assess the estimated costs that would be incurred, decide the amount of loan required and use the personal loan interest rate calculator to gauge the amount of interest that would be charged.
  • Buying hi-end gadgets: You may not want to be boxed within the idea of living a moderate lifestyle. The urge to buy a new motorcycle or spend on a costly entertainment centre or gaming computers can be easily satiated with the amount received from a personal loan. Personal loans lend you the advantage to make an immediate purchase instead of having to save for months to make the purchase. Though you may have to repay the loan amount along with interest, it saves you from the pain of having to wait before buying your favourite item.

Additional Read:  Things to Check Before Availing a Personal Loan Online

Difference Between Business & Personal Loan

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Loans are a great way to get cash liquidity in times of need. They come in handy when in need of urgent capital, may it be for your business or any other personal reason. Borrowers usually get perplexed about whether to go for a business or a personal loan. Both are avail for different purposes. yet people get confused while opting for it.

Business Loan is apply when you require a large amount of money for funding your business. The business may be  partnership firms, pvt. Ltd, private etc.

Personal loans are unsecured loans avail by individual to fulfil their personal needs. It may be for education, wedding, buying expensive gadgets, travel, holiday, medical emergency and much more.

Hence, before opting for the loan analyse your situation wisely and go for the option that best suits your needs.

Must Read: How to Expand Your Small Scale Business into Large one?