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Know more about Personal Loans |
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Questions
Personal Loans
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What is a Personal loan?
An unsecured loan is called a Personal loan. This implies that you don’t have
to give any security, like in car loan or home loan, where the underlying asset
is mortgaged with the bank. Normally, the bank does not ask for guarantors too.
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Who is eligible for a Personal Loan?
The eligibility criteria and their specific details may vary from bank to bank based
on their perception of risk associated with the personal loan. But all banks categories
their borrowers into the following three groups:
- Salaried individuals
- Self employed individuals
- Self employed professionals
Other factors which are taken into consideration to decide the eligibility of the
borrower are:
- Age
- Residence
- Work experience
- Repayment capacity
- Place of work
- Monthly income
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What can I use a Personal Loan for?
Personal Loans can be used for anything and everything. There are no restrictions
on the end use. You could use the loan money to finance anything such as Consumer
durable, Festivals, Marriage, Pension, and Personal Computer.
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How do I take a Personal Loan?
You can always start by checking out with different banks offering such as best
offers - interests - EMI schemes etc. Also find out the eligibility criteria and
the documents required to submit before you apply. Try to compare the different
interest rates of various banks in arthamoney.com and apply online for the best
deal.
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What are the loan eligibility criteria?
Loan eligibility depends upon various factors which differ from banks to banks.
The main factor is your ability to repay the loan. Also your profile, in terms of
residence and the place you work in also matters. Also make sure that you check
other eligibilities of the bank that you are applying for.
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What is the maximum tenure of a personal loan?
The tenure of personal loan varies from 3 years to max 5 years.
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What are the fees and charges payable and when are they payable?
There are processing fees that are charged at the time of processing. The second
charge is the prepayment penalty paid at the time of pre-closure.
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What is interest rate charged on personal loan?
The interest rate varies from bank to bank. And usually it varies from 14%-26% depending
upon your profile.
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How long does it take to process the loan?
Usually banks disburse a personal loan within seven working days.
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Who can be my co-applicant?
Personal Loans can be applied jointly with a co-applicant (either your spouse or
your parents). This helps you to increase your income eligibility and you can also
avail for a larger amount of loan.
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What are the advantages and disadvantages of Personal Loans?
Advantages of Personal Loan
- You need not offer a security
- You need not offer a guarantor
- You can use the money for whatever you want. Here the lender is not at all bothered
about why you need the loan
Disadvantages of Personal Loan
- Interest rate will be high
- Your profile has to match with the eligibility criteria of the bank
So before you take a personal loan Please
see the following:
- Ensure that you get the best deal
- Always compare the interest rates of different banks? Look at the processing fee,
service charges, documentation fees, prepayment charges and other hidden charges
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