Personal Loan: An Overview
A personal loan is a short to medium term unsecured loan (no collateral) that you can use to meet current financial needs. Though most commonly used to meet expenses related to debt restructuring, vacations, unexpected medical expenses and down payments, a personal loan may be used for practically any type of expense. If one looks at the benefits of personal loans, one can start with the fact that the tenure of a personal loan is shorter as compared to a mortgage. Unlike mortgage, which is for ten, twenty, perhaps thirty years, a personal loan is commonly for between one and five years.
Personal Loan Interest Rates
As mentioned earlier, personal loans feature one of the highest interest rates among debt instruments only superseded by credit card interest rates. Currently personal loans are available in India from 11.99% onwards. The exact interest rate differs from bank to bank as well as on the basis of the loan amount, the loan tenure, your income level as well as your credit history.
Compare Personal Loan Interest Rates of Different Banks
Table1. Table showing personal loan interest rates and processing fees of various banks and NBFCs*
Name of the Provider
|State Bank of India||12.55%-17.65%||1%-3% of the loan amount + applicable Service Tax|
|Axis Bank Limited||15.50%-24%||1.50%-2.00% of the loan amount + Service Tax, as applicable|
|ICICI Bank||11.49%-22.00%||Upto 2.50% of the loan amount + Service Tax, as applicable|
|Punjab National Bank||3.10%-6.10% + MCLR||
|Bajaj Finserv||16%||2.25%-3% of the loan amount|
|Fullerton India||17.25%-35%||Upto 6.5% of the loan amount|
|IndusInd Bank||Upto 23% per annum||Upto 2.5% of the loan amount|
|Standard Charted Bank||Upto 27%||Upto 2.25% of the loan amount|
|Citibank||Values based on customer profile; starting at 11.75%||Upto 2.50% of the loan amount|
Upto 2.5% of the loan amount,
subject to a maximum of 25,000 INR and a minimum of 1,000 INR
|Kotak Bank||11.50-24%||Upto 2% + ST + Other levies|
|HSBC Bank||12.25%-17.50% p.a.||Upto 2.5% of the disbursed loan.|
|Tata Capital||Up to 19.5%||One time charge that varies based on individual applicant profile|
*The figures provided in the table are indicative subject to change from time.
Why Choose a Personal Loan
There's no limit to the number of ways a personal loan can be put to use. It can be taken for any personal reason, such as:
- A monetary aid for the renovation of your house
- To meet wedding expenses one of the important and expensive days
- To buy a new iPhone
- To plan and spend holidays with the family
- To simply pay off credit card bills or other debts
- To meet business requirements such as advertisements or new table tennis table for the team
Personal loans act as the best-fitted medium to smoothen up cash flow at times of stringency. The key reason for some to prefer a personal loan is because of minimal documentation, fast processing times and the flexibility for use of the loan. Witnessing the huge potential of this market, leading banks and NBFCs in India are offering personal loans to both salaried and self-employed individuals.
What are the different types of Personal Loans?
Types of Personal Loan
Features of the loan
Financial Institutions offering this loan
Personal Loan For Low CIBIL Score
Though it is not easy to get a personal loan with a low CIBIL score, but you will have to negotiate with banks or you can opt for a secured personal loan. Some banks may offer a personal loan to you if your income has increased by a good amount recently.
|Business Startup Loan||
ICICI Bank, Small Industries Development Bank of India (SIDBI) and India Finance Corporation Of India (IFCI), Kotak Mahindra, TATA Capital, Standard Chartered, Bank of Baroda, Oriental Bank, etc.
|Same Day Loans||
Citibank & HDFC
|Loans For Unemployed||
Government loan plans for the unemployed, TATA Capital, India Lends, Max finance, etc.
|Govt. Loans for Small Scale Businesses||
State Bank of India, Bank of Baroda, Andhra Bank
Loan schemes by government- Small Industries Development Organization (SIDO), National Small Industries Corporation Limited (NSIC), SIDBI, National Bank for Agriculture and Rural Development (NABARD) and World Association for Small and Medium Enterprises (WASME)
|Small Business Loans for Women||
HDFC, TATA Capital, Citibank, IndusInd, Fullerton, Kotak Mahindra, ICICI, Bank of Baroda, IDBI, Punjab & Sind Bank, Dena Bank, etc.
HSBC, HDFC, TATA Capital, Kotak Mahindra, Citibank, IndusInd, Standard Chartered, ICICI, Allahabad Bank, Bank of Baroda, etc.
|Home Improvement Loan||
HDFC, ICICI, PNB, Canara Bank, DHFL, Bank of Baroda, etc.
SBI, TATA Capital, Arogya Finance, etc.
||SBI, HDFC, ICICI, Tata Capital, Axis Bank, Citibank, IDBI, PNB, Kotak Mahindra, Bank of Baroda, etc.|
Points to Consider before Applying for Personal loan:
To choose from the best personal loan offers is important, but equally important are numerous other factors that should be taken to prevent personal loan becoming the burden causing a big hole in the pocket. Here are some points you must never overlook while applying for personal loan.
- Plan your budget and stick to it
- Ensure that the decision about applying for Personal Loan will bring real benefits inspite of being just a short term fix
- Check your credit report
- Borrow only the personal loan amount that you really need
- Know your APR(Annual Percentage Rate) i.e. How much the loan would cost in interest per year
- Do a complete and detailed market survey of the various Personal Loan options like their interest rates, the pre-payment charges levied, and any other terms and conditions.
- Look for zero processing fees and zero-penalty for pre-payment option. In case this is not available, then prefer borrowing with lowest cost. Sometimes additional costs add up and make a huge difference even after you are offered lower interest rates
- Do not forget to do personal loan comparison. Ideally one must compare personal loan offers to avail the most suited scheme.
- Look for payment delivery charges such as early payment charges
- Carefully look at the risk involved for situation when you are unable to repay the loan amount
- You must always choose the right loan using our comparison tool
- Always ask for customized personal loan quotes from at least three providers, as many banks offer personalized plans.
- Learn about personal loan guarantor terms & conditions
Features & Benefits of Personal Loan
- It is an unsecured loan which means a loan offered without keeping any assets (e.g., house or car) as collateral. Unsecured personal loans are offered based on the applicant's credit history. If you have not defaulted on payments of an earlier loan and have paid all your credit card bills on time, you will be viewed as a low-risk borrower.
- Interest rates for personal loan is allocated according to the customer's salary, the amount being borrowed, loan tenure and other criteria that differ from one lender to another.
- The repayment time period is fixed and ranges from 1 to 5 years.
- A personal loan requires minimum paper work and is often approved within 48 hours of submitting an application.
- In addition to a processing fee (up to 1% of the amount borrowed), other charges levied on a personal loan includes pre-payment fee, late payment penalties, documentation charges and cheque bounce/swap charges.
Personal Loan - Eligibility Criteria
Any Indian national salaried, self-employed or professional is eligible for a personal loan. However, this loan is an unsecured loan, thus lenders make sure that they are not lending money to a client with higher probability of risk involvement. To ensure the same, they consider numerous factors before providing personal loans:
- Repayment ability: Applicant should have been employed by your current organization or been involved in your business for a certain number of years
- Income: Applicants should have the lender stipulated monthly repaying capacity or minimum salary
- Age: Applicant must qualify for the applicant age bracket defined by the lending institution
- Credit Rating: Applicant should have the bank specified credit score and suitable credit history
- Existing EMI's: Applicant should not have any other loan liabilities or must have strong ability to take addition debts.
Documents Required for Personal Loan
Most banks have similar guidelines for documentation requirement for personal loan. The list of essential documents you need for a personal loan are:
For self-employed individuals:
- Duly signed and filled application form
- Passport Size Photographs
Identity Proof: To apply for a Personal Loan submit one of the following documents as identity proof:
- Aadhaar Card
- Voter's ID Card
- Employer issued ID card
- Driver's license
- Ration Card
- Electricity bill
- Title deed/utility bill/municipal tax receipt
- PAN Card
- Telephone/mobile bill
- Life Insurance premium receipt
Proof of Age: List of documents that are accepted for age proof to apply for Personal Loan are:
- Birth Certificate
- Secondary school certificate (Class 10)
- PAN card
- Aadhaar Card
- Voter ID card
- LIC Policy or premium receipt
- Ration card
Address Proof: For address proof confirming your present residential address, submit any one document from the list:
- Government-issued employee residence proof
- Ownership and title deeds of property
- Telephone bills
- Ration card
- Electricity bill
For salaried individuals:
- A copy of latest salary slips (3-6 months depending upon the bank) or salary certificate
- Form 16 and a copy of ITR for the last two years
- Copy of the appointment letter or an employment certificate to prove job continuity
- Last 3 months' salary account statements
- Proof of employment certificate
- Last two years' computation of income, Profit and Loss statement, and balance sheet certified by a C.A.
- Latest six months' bank statement of all your bank accounts
- Last two years' sales and copies of acknowledged IT returns as proof of turnover
Checklist for applying for Personal Loan:
Personal loan allows you to borrow money for almost all your requirements and to have a better experience, there are certain points you must know before availing a personal loan.
- Loan Amount & Tenure: Depending on your income and repayment capacity, decide upon the loan amount you need and for how much duration.
- Eligibility: Checkout eligibility criteria of different banks and identify in which one do you fit the most.
- Processing Time: For your immediate monetary requirements, knowing about the processing time of personal loan can be of great help.
- Interest Rate & other charges: Your complete loan experience depends upon the interest rate, processing charges, prepayment charges and other such charges. Know them before hand to take a well-informed decision.
- Repayment History: Your financial health will define your credit worthiness. Make sure you have all the necessary documents to prove your strong credit history and income.
- Documentation: Jot down the list of documents required to apply for personal loan.
- Foreclosure: Do not ignore independent foreclosure policy and charges of different banks.
List of Banks Providing Personal Loans in India
Various companies offer personal loans in India. Different plans provided by various leading personal loan providers in India are:
Top 10 Providers for Personal Loans in India:
State Bank of India
With its headquarters in Mumbai, SBI (State Bank of India) is a leading Government-owned bank in India and offers different types of exciting personal loans to the customers. The 4 different types of personal loans that SBI offers are:
Rate of Interest of SBI Personal Loan:
- The base interest rate of SBI Xpress Credit Personal Loan is 10%.
- SBI Saral personal loan interest rate is 18.5% p.a.
- The interest rate for the Jai Jawan Pension Loan scheme is 14.75% per annum.
- The interest rate for SBI Festival Personal Loan is 16.75% per annum.
Some of the highlighting features of SBI Personal loans are:
- Attractive rate of interest
- Timely Discounted Schemes
- No Hidden Charges
- Zero Prepayment Penalty
- Quick Loan Approval
- Online Loan Submission
- High Quantum of Loan
- 24/7 Customer Support
Axis Bank Limited
With a network of 2500 branches (as on March 2016), Axis Bank is the third largest private sector bank in India and is trusted widely for its Personal loan plan. With features like minimal documentation, simple procedures, and quick loan approval, Personal loan scheme is availed widely by people from all over India to fulfill their immediate financial requirements.
- Axis Bank offers personal loans for both salaried and self-employed individuals.
- Personal loans from Axis Bank are available from Rs. 10,000 to Rs. 15 lakhs
- Axis Bank offers a flexible tenure for personal loans ranging between 12 to 60 months.
- The personal loan interest rates charged by the bank ranges between 15.50% and 24%. (This is floating rate and is subject to market fluctuations.)
- Axis bank offers eDGE loyalty points on personal loans. These points can be redeemed for cash surplus and discounts.
- Multiple repayment options are offered by Axis Bank which includes Electronic Clearing Services or ECS and Post Dated Cheques.
With over 4000 branches, ICICI Bank offers multipurpose personal loan to its customers all over India. One of the biggest reasons for ICICI bank being one of the largest facilitators of Personal loan is its adherence to quick loan approval processing. Without any need of security, collateral, or a guarantor, and with just nominal documentation, a person can apply for ICICI Bank Personal loan and get instant approval too.
- Rate of interest: Interest rates as low as 11.49% - 17.50% (Fixed) on your personal loan.
- Loan amount: 20L Max loan amount
- Loan tenure: 1-5 Years
Benefits of ICICI Bank Personal Loan:
- ICICI Bank offers fixed Interest rate for Personal loan, i.e. interest remains unchanged throughout the loan tenure
- To get ICICI Personal Loans one does not require going through large documentation process.
- ICICI Bank facilitates quick loan approval and disbursal
- ICICI bank offers direct credit of the personal loan amount via Fund Transfer (FT)
- ICICI bank offers simple repayment options of ECS, AD or PDC.
- It is disburse within 72 hours* of document submission.
ICICI Bank offers Personal Loan for:
- House renovation
- Purchase of consumer durables
- Short Term loan for equipment purchase
- Short Term Working Capital
- Any other personal emergency
Punjab National Bank
Punjab National Bank, also popular as PNB, is an Indian public sector bank that is known for its personal loan services along with many other core banking services. PNB offers Personal Loan to make available financial assistance to the public for their personal needs.
Personal Bank by Punjab National Bank is offered to:
- Salaried applicants
- Self-employed applicants
- Pensioners drawing their pension through any of the PNB branches in the country
- Punjab National Bank offers floating interest rate to the applicants. Base Rate - 9.60% | Base Rate+ (3% to 6%)
- PNB offer Personal loan for upto 5 years tenure
- Guarantor Requirement : Guarantor required
- Bank offers a personal loan of up to 20 times the net monthly income for salaried individuals and up to Rs. 10 lakhs to pensioners.
UCO Bank, formerly United Commercial Bank, is one of the oldest and major banks in the country. UCO Bank Personal Loans or UCO Bank Cash is one of the many widely trusted services and is taken up by several individuals to meet their personal financial needs. UCO Bank offers personal loan without the need of depositing collateral security for an amount of up to Rs. 2 Lacs. For loan amount above Rs. 2 Lacs, the applicants have to offer collateral for only 40% of the loan amount.
UCO Bank Personal Loan Highlights:
- Loan Scheme: UCO Cash
- Loan offered to: Both Salaried & Self-employed individuals
- Loan amount: Minimum Rs. 50,000 and Maximum Rs. 10, 00, 000
- Repayment tenure: 12 - 48 EMIs for men and 12 - 60 EMIs for women
- Rate of Interest: base + 5.40% = 15.35% for men and base + 4.40% = 14.35% for women
Presence in India since 1959, HSBC bank is one of the world's largest banks with more than 89 million customers globally. HSBC offers a great many financial products and services to the Indian customers, of which Personal Loan is a distinctively popular product. In major cities in India, HSBC offers Personal loan with features like attractive interest rates, nominal documentation, and speedy processing.
HSBC offers Personal Loan for:
- Marriage expenses
- Shifting an existing loan from another bank
- House restoration or other home related payments
- Buying consumer durables or equipment
- Travel expenditures
- Any other personal needs and emergencies
- Rate of interest for personal loans ranges between 11.99% to 18.34%
- HSBC offers personal loans with flexible tenure of up to 5 years (i.e. tenure from a minimum of 12 months onwards with additional block of 6 months).
- HSBC offers maximum loan amount uptoRs. 15 lakhs. Selected customers may be eligible for loans uptoRs. 20 lakhs.
HSBC offers easy monthly repayment through:
- Equated Monthly Installments (EMI)
- Electronic Clearing System (ECS)
- Standing Instruction (SI) on HSBC bank account
- For HSBC personal loan, there is no requirement of collateral/guarantor
- HSBC offers easy documentation, quick processing and disbursal for Personal loan.
Head quartered in Mumbai, India, IDBI Bank Limited (IDBI) is currently 10th largest development bank globally for its extensive reach with 1413 branches and 2413 ATM's. Personal Loan from IDBI Bank is offered to both self-employed professionals and salaried individuals. IDBI Personal Loan plans are an amazing way to meet any personal financial requirements. From buying an electronic gadget to renovation of house to a family vacation, IDBI makes sure none of your needs or wants go unfulfilled due to lack of cash.
Available variants of IDBI Bank:
- Salaried and self-employed professionals
- Salary a/c in IDBI with built-in Overdraft (OD) facility
- Salary a/c in IDBI with built-in OD facility to IDBI Bank Pensioners
IDBI Personal Loan Details:
- Interest Rate (Fixed): 12.75% to 13.75%
- Processing Fees: 1% of the loan amount +applicable taxes
- Loan Tenure: 60 Months
- Pre-closure Charges: 2.00% + applicable taxes. After 6 months the charges are NIL.
- Guarantor Requirement: No Guarantor Required
- Attractive personal loan rate
- Low Processing Fees & Documentation Charges
- Faster Approval & Minimum Documentation
- Repayment period up to 60 months
- No collateral/security
- The Loan tenure is 1 yr 5 yrs
- Loan amount = Rs. 50,000 Rs.1000000
Standard Chartered Bank
Operating in India since 1858 with branches over 42 cities, Standard Chartered bank has always been known for its exciting schemes, friendly repayment provisions and competitive interest rates. The same are the features of personal banking offered by Standard Chartered Bank. Under its personal banking, Standard Chartered offers personal loans, home loans, loans against securities, etc.
Like other banks, Standard Charted understand the value of personal loan for every individual to meet his/her dreams of life without worrying about cash, and has thus formulated attractive features of Personal loan.
Features of Standard Charted Personal Loan:
- Standard Chartered Personal Loan is offered to both salaried and non-salaried individuals.
- Bank offers flexible repayment tenures from 12 months to 60 months.
- There is no need of security or guarantor to avail Standard Charted' Personal Loan.
- Documentation processes are easy and simple
- Personal loan online from Standard Chartered can be availed with instant approval.
- Standard Chartered offers personal loans up to Rs.30 lakhs to salaried employees and up to Rs.10 lakhs to the entrepreneurs.
Standard Charted Bank Personal Loan Details:
- Interest Rate (Monthly reducing balance): 12.50% to 17.00%
- Processing Fees: Nil
- Pre Closure Charges: Pre-closure permitted after 1 year. 5% of principal outstanding (plus ST)
- Loan Tenure: 1 year to 5 years
- Guarantor Requirement: No guarantor required
Head quartered in Andhra Pradesh, Andhra Bank is a mid-sized public sector bank and has more than 2000 branches in India. Andhra Bank offers different loans to meet monetary needs of the people; every loan plan is tailor-made to help the individual borrow for what he actually requires.
Andhra Bank Personal Loan is divided into two different categories:
Consumer Loans are the personal loans given to salaried individuals. Personal loan is offered to salaried individuals to meet their personal needs that can be purchasing consumer durables like televisions, or making wedding arrangements for a child, or sponsoring child's higher education. This scheme caters to the consumer credit requirements of persons with a regular source of income.
Clean Loans are the loans given to self-employed individuals for their personal requirements. With Clean Loans by Andhra Bank, a self-employed consumer can easily meet his person monetary requirements such as a children's education and weddings, paying off credit card debts, vacations etc.
Andhra Bank Personal Loan Details:
Interest Rate (Floating):
- Upto 3 years :BR+5.50%
- Above 3years : BR+5.50%+0.25%
- Loan Tenure: 60 months
- Pre Closure Charges: Nil
- Guarantor Requirement: Guarantor required
In terms of its assets, HDFC bank is the fifth largest bank in India. HDFC bank has won the trust of the customers with its exclusive Personal Loan plans which ensure triple benefits, i.e. faster loan, competitive pricing, and transparency. With a flexible loan duration ranging 12 to 60 months and a competitive interest rate, HDFC Bank offers one of the best personal loan services in the country.
HDFC Bank Personal Loan Details
- Interest Rate (Monthly reducing balance):12.75% to 20.00%
- Processing Fees: 0 to 2.5% of Loan Amount
- Loan Tenure: 1 year to 5 years
- Pre-closure Charges: Pre-closure permitted after 1 year. 4% of principal outstanding (plus ST) in 2nd year. 3% (plus ST) in 3rd year. 2% (plus ST) afterwards
- Guarantor Requirement: No guarantor required
Features of HDFC Personal Loan
- With its quick loan disbursal feature, HDFC Bank assures loan applicants that they would not have to go through delays and will enjoy fastest loan disbursal time as compared to a other private sector as well as public sector banks in the country.
- HDFC Banks offer loans for salaried, self-employed individuals, working professionals at competitive interest rates.
- HDFC Bank is one of the leading banks to offer online personal loan applications and submissions with instant approval.
- HDFC Bank offers lower prepayment charges for personal loans compared to other banks.
PaisaBazaar is here to help you find a Personal Loan
At Paisabazaar.com, you are saved from the hassle of visiting individual sites of banks and other lenders to compare personal loan options available to you. Our platform allows you to review and compare personal loans of different types based on key criteria specified by you. Find the loan that meets all your terms and conditions and apply for it on the same website. Our personal loan EMI calculator helps you assess your EMI for the personal loan before applying. If you have already decided on an EMI amount, you are better prepared to manage your finances.
Why should you choose Paisa Bazaar for your Personal Loan assistance?
Our forte. Your benefit
Our expertise in identifying the right deal is a benefit for those looking to take personal loan. With the ultimate feature of comparing different personal loans, we handpick personal loan offers from several banks so that intended borrowers can take well-informed decisions. To make sure that you take a well-informed decision, we have simply broken down different aspects that decide how best the loan type would match your requirement. To help you skip the fine print terror, we have segregated the sections - EMIs, eligibility, maximum amount that can be borrowed, fees, and hidden charges, so that you choose only what you need.
Be it for higher education, marriage, shopping needs, a personal emergency, or just need of extra cash, you can anytime get instant cash with personal loans. And to help you in emergency situation, we offer 24*7 services.
We help you apply online
No doubt, online services save time as well as money. We further ease the experience of online personal loan application by offering our super friendly customer service to answer all your concerns while you are applying.
We let you compare, but that's not the limit
Yes, we have a platform where you can compare schemes by companies offering personal loans, but that's not all at PaisaBazaar's platter. Our experts assist every customer in applying for a personal loan in the bank of his choice to the stage you get your loan amount.
A-Z customer support
Paisa Bazaar's customer support team help the interested borrowers understand the complete process of availing personal loan or personal loan against mutual funds and clear all their doubts regarding eligibility, offers, procedures, documentation, and repayment options. Not just that, they even coordinate with the banks and follow up on your behalf.
Personal Loan EMI Calculator
Personal loan EMI calculator proves to be the most valuable personal loan comparison tool. No doubt, Personal loan is one of the simplest loan types with no obligations connected regarding usage of the borrowed money, still there are several aspects to consider, which can be easily done via personal loan EMI calculator.
A Personal Loan Calculator helps you to:
- Identify the right amount you need to borrow
- Figure out the amount of interest you would have to pay
- Know the most suited tenure for personal loan
- Borrow with the most competitive personal loan interest rate
How to Calculate EMI on Personal Loans
Before you apply for a personal loan, it is important that you have a budget in mind as well as an EMI amount that you are comfortable with. The EMI calculation helps you ensure that your monthly budget is not stretched and you minimize the chances of default on your personal loan. Use the Paisa bazaar Personal Loan EMI calculator to get the EMI amount based on your inputs such as loan amount, interest rate and loan tenure.
Personal Loan FAQs
Q. How is the maximum EMI Amount calculated?
Ans: Banks mostly based their loan amount based on the maximum EMI amount that the individual can afford. This EMI usually capped at 30% to 40% of the applicant's net take home salary. If you have any existing loans, the maximum personal loan EMI will drop accordingly.
Q. Does my credit history and score affect my chances of a successful application?
Ans: A personal loan is usually based on criteria such as your monthly net income and your previous credit history including score. Hence, credit score plays a key role in both ensuring the success of the application as well as in determining the interest rate of the loan.
Q. Is there a prepayment penalty on personal loan?
Ans: Yes. Most banks and NBFCs charge a prepayment penalty of 1% to 3% on the outstanding principal amount of a personal loan.
Q: Can I get a personal loan for pensioner if I have a pension account with one of the leading private banks in India?
Ans: There are several private as well as public sector banks, which offer personal loan to pensioners. However, there is certain age cap with every bank, which you must not exceed at the time of repayment period. You can get a Personal loan of up to 10-20 times (depending upon banks' T&C) of your monthly pension amount.
Q: I want to buy a car for commercial purpose. Should I take Car Loan or Personal Loan?
To buy a car for commercial purpose you would either have to apply for personal loan or Commercial Vehicle loan. Commercial vehicle loan are comparatively cheaper than personal loan, however there are some specific eligibility criteria that you need to fulfill. In case, it is difficult to meet the eligibility criteria of commercial vehicle loan, you can avail a personal loan.
Q: What are some of the pros & cons of personal loan?
Personal Loans can help you manage all kinds of money troubles; however they come with certain pros & cons, which you must know. Here are disadvantages and advantages of personal loan
- No collateral: It does not require any collateral or security to avail a personal loan; you can easily apply for a personal loan, as long as your Credit Score is good.
- Minimal paperwork: As compared to other secured loans, personal loans require much less documentation.
- Quick Approval: Several banks have introduced e-application process which is faster as well as hassle free. Some banks even offer pre-approved personal loans and e-approvals.
- Flexibility: There is no capping on the usage of borrowed personal loan amount unlike other secured loans.
- Qualification criteria: While the guidelines for availing personal loan vary from bank to bank, qualification criteria are quite strict. It is must to have a good credit history to avail personal loan.
- High Interest Rates: Interest rate of personal loan is though less than interest rates on Credit Cards but still higher than secured loans.
- Prepayment penalty: Several banks charge prepayment penalty on prepayment of Personal Loans.
Q: How can I bargain for better rate of interest for Personal loan?
Yes, there are certain points that can help in getting lower interest rates for the borrowed personal loan amount.
- Due to competition, several banks announce schemes on personal loans during festive season. Request for a personal loan quote at this time as such seasonal offers are good to get attractive interest rate deals.
- Credit score can be a reason of rejection, and it can be a reason to get a better deal. You may bargain with banks for best personal loan deal on having a high credit score.
- A good track record for repayment of loans can be helpful in getting attractive deals