Blog #Personal Loan

When there is the urgency of funds or any purpose, a personal loan can assist every competent person in using it handily. A personal loan is now available online on websites of different Banks and NBFCs, and there are even instant personal loan apps that help in the quick dismissal of personal loans. These websites provide potential customers with all necessary information regarding personal loans and even the comparative rates of different personal loans. The fundamental criteria to be eligible for a personal loan are the applicant's age between 23 to 58 years, net salary or income of at least Rs 30000, minimum of two years of experience in a job or any profession, and residence proof where the applicant is residing for at least a year or more. According to the borrower’s convenience, both the personal loan and loan against credit card have their advantages and limitations; according to the borrower’s convenience, one can be chosen.

On the other hand, credit card loans are handy and can be used physically in Store or online. If a person increases his credit card purchases and cannot pay off the dues on time, it can cost him an extremely high-interest rate on the remaining unpaid amount. It can further get accumulated and push the borrower into a debt trap. The credit card companies do not compel the borrower to pay off the balance all at once. Paying the minimum amount due or 'MAD' mentioned on the credit card statement is enough. Moreover, the credit card can be used until the remaining balance on it gets exhausted.

Both Personal Loans and Credit Card have their benefits and drawbacks. Eligibility criteria for most personal loans are not that rigid in comparison to credit cards. The purpose of debt consolidation with the low rate of interest personal loans serves the best. Personal loans can be borrowed online or offline, and the amount of a personal loan can get disbursed within half an hour once document verification is done. There are several drawbacks of personal loans too. Interest rates of personal loans range from 13% to 36% and have additional processing fees, which is on the higher side when compared to credit cards. HDFC Bank Personal Loan interest rate and some other banks providing personal loans are comparatively lower. Thereby it helps the customers to get a pocket-friendly personal loan. The credit score of the borrower must be high to get a personal loan approved. Even the documentation process in the personal loan plays a pivotal role, but that does not happen in the case of a credit card.

Credit card applications can be done anytime, and no additional documentation is required for it.  If a person has a good credit rating, it is enough to make him eligible for a credit card loan. Credit cards also furnish options to transfer balance at times at zero per cent interest. The repayment period also ranges anywhere between 12 to 21 months which is the best for debt consolidation. There is no requirement of physical presence in a bank for application and approval of a credit card related loan. Still, there are some drawbacks of the credit card which must be taken into account. The interest rates of credit cards can be higher depending on the credit cards' APR. Even some credit cards also attract annual fees, late fees and over the time limit fees. Moreover, the essential criteria for a credit card loan with low interest rates are a CIBIL credit score of 700 or more. 

A personal loan is a better option for salaried individuals and self-employed people with a continuous cash flow. Whereas, credit card loan is considered to be a revolving debt. So the ultimate winner depends upon the requirements of the borrower and his financial stability. It is always recommended for people to get loans with low rates of interest. So, according to the borrower’s convenience, he can choose a cheap personal loan or a cheap credit card loan.

Must Read:- Alternatives For Repaying Personal Loan For Defaulters 

Two main loan options are popular to get funds in times of need. Both loan options have their own advantages and disadvantages. So it's important to compare all the options we have and then choose our ideal loan option.

 The two loan options that we'll compare are: 

1. Personal Loan.
   
   
2. Loan Against Property.

Let's learn more about these options in detail :-

Personal LoanIt is an unsecured loan that can be availed at any bank or NBFCs across the nation. Customers have the complete flexibility to use the funds they get through personal loans freely. Banks don't monitor the end usage of the fund. 

So they can use the funds gotten from a personal loan for various purposes like: 

1. Wedding.
   
   
2. Vacation.
   
   
3. Child's Education Fee.
   
   
4. Debt Consolidation.
   
   
5. Down Payment.
   
   
6. Miscellaneous Expenses.

Borrowers have to repay the loan amount they have borrowed along with the interest rate. Missing even a single instalment can affect your credit score. So it's advisable to choose the repayment tenure and structure by comparing all the options available in the market. 

There are a lot of advantages that the customer can avail of by applying for a personal loan. 

We have mentioned some of the common advantages below: 

1. Hassle-free processing :- The entire process of personal loans is very quick, simple and hassle-free. You can easily get your personal loan application process within 2 to 7 business days. A lot of banks will approve your application quickly if you are someone who has a high credit score. You can even check your status using HDFC personal loan application status.
   
   
2. Unsecured :- Personal loan is an unsecured loan. So you don't have to pledge any asset as collateral or security. You can easily get funds through this loan even if you don't pledge any assets.
   
   
3. Flexibility :- banks have given customers the flexibility to use the funds they've got through personal loans freely. So they can use the funds for multiple purposes at the same time. However, the main rule of a personal loan business is that you can't use the funds for any illegal activities.
   
   
4. Credit Score :- You can use this personal loan as an opportunity to increase your credit score. To do this, you'll have to repay the instalments and EMI on time. And by doing this, you will notice a change in your credit score. So, a personal loan is an ideal option to increase your credit score.
   
   
5. Documentation :- The documentation process of the personal loan is very quick and simple. You'll have to complete the application form and attach some basic KYC documents and get it approved.

Loan Against Property (LAP)A loan against property is a loan option that can be used to get a high loan amount. For this loan option, you'll have to pledge your asset/property to get funds. The property you've pledged will be calculated at the market rate, and the actual market rate will determine the loan amount you'll get. 

Borrowers have to repay the amount they've borrowed from LAP along with the interest rate. In case the borrower can't repay the loan amount, and then the bank has every right to seize the property and sell it at an auction to recover the loan amount. 

Advantages of LAP

1. Interest Rate :- A loan against property is a secured loan, so the interest rate that the bank will charge is very low. The interest rate is usually between 12% to 22%. However, the interest rate charged will vary from one bank to another.
   
   
2. Availability :- You can easily apply for this loan option through any bank, financial institution or NBFC (Non-Banking Financial Companies) across the nation. So you get the flexibility to compare your options and then choose your ideal bank.
   
   

Repayment Tenure:- The repayment tenure for this loan option is up to 20 years. So if you're looking to get a high loan amount and repay it after some years. Then LAP is an ideal loan option.

Must Read:- PERSONAL LOAN - A SAVIOUR IN TIMES OF EMERGENCIES 

Learning from the mistakes of others can help you in personal loan moves up quickly in your life. We have put together some like personal loans of the common mistakes that are committed while applying for a personal loan. By knowing all of them or any other loan you can get the best personal loan.

1)  Not checking your credit score 

Checking credit score is very important for a personal loan because the lenders initially check your score to evaluate your creditworthiness related to a personal loan. If you do not have a good credit score or ratings there are chances of rejection or high-interest rates in a loan. You can improve your credit score and avail yourself of personal loans at a good rate.

2) Applying for too many personal loans

This is a misstep when you want funds or any other loan for your immediate needs. In a desperate situation for money, you might tend to apply for a personal loan from too many lenders. When the lender processes your application, a hard inquiry is made which will reflect on your credit report. If too many hard inquiries are made in a personal loan, it could hurt your credit score. Moreover, the lenders would assume you are credit hungry and hesitate to grant you the credit related to a personal loan.

3) Settling for less

Many tend to take a personal loan based on your personal loan or referral or instant approval. Though it is not a bad idea to consider, you might lose out on the best offers when you fail to shop around. Instant approval personal loans might have a higher interest rate where you would have got it at cheaper prices from another lender. Though it may take more time, it could lower your debt burden considerably.

4) Not reading the fine print

The lenders might assure you of a speedy approval and a high loan amount during your application. Don’t fall prey to such promises. Go through the terms and conditions carefully for a personal loan from TATA Capital Personal Loan and be informed about the charges levied upfront. If the terms are not favorable to your repayment capacity, make the right choice in choosing the best loan.

5) Opting for a longer tenure

In order to pay smaller EMIs, you might want to opt for a longer tenure. Smaller loans or any other loan periods help you save more on interest outgo and overall debt burden.

6) Taking a loan without any purpose

A personal loan is advisable to take when you have real financial needs. Taking it for recreational purposes like throwing a party to your friends, going on a vacation, etc. will become a burden later.

7) Not checking eligibility criteria

Different lenders have different eligibility for Personal Loan criteria such as income, age, employment, good credit score, residential location and, etc. Applying for a personal loan or any other loan after checking your eligibility criteria could help you improve your eligibility and get better personal loans.

Conclusion-

Do not ignore alternative loan options, such as secured loan options including top-up home loans, loan against securities, loan against property, and loan against FDs. 

Just like personal loans or any other loan these loans also do not have any end-usage restrictions in a loan and usually come with lower interest rates and longer tenure options than personal loans. For instance, existing home loan borrowers can opt for top-up home loans available at interest rates usually as low as 8% p.a. and tenure which may go up to 30 years or it depends on your personal loan depending on the residual home loan tenure. Similarly, those who have sizable long-term investments can consider availing loans against securities in order to meet their financial shortfalls at lower interest rates without selling their securities.

Read More:- During and after mistakes of personal loan 

The pandemic has affected our economy badly. It is one of the most deadly pandemics after the Great Influenza pandemic of 1918-1919. It was the worst natural disaster in US history, with an estimated 675,000 deaths. And during these challenging times, the only hope that people have is loans. 

What is a Personal Loan? 

It is an unsecured loan that is used by individuals to get instant fund assistance. You don't have to pledge any asset as collateral to get funds from this loan. Many banks and NBFCs (Non-Banking Financial Companies) provide the facility of personal loans. Personal loans have relatively low interest rates than other types of borrowing. There are a lot of benefits that you can get from applying for a personal loan. 

Some of the common benefits are: 

1) Hassle-free processing:- The entire personal loan process is speedy and hassle-free. The process will only take 2 to 5 days to get processed. A lot of banks will approve your application quickly if you have a high credit score. 

2) Unsecured:- Personal loan is an unsecured loan. So you don't have to pledge any assets to get funds from this loan. 

3) Flexibility:- Customers have the flexibility to use the funds they get through this loan freely. Banks don't monitor the end usage of the fund. So you can use the funds for various purposes. 

4) Credit Score:- If you're someone who has a bad credit score, then you can use this loan as an opportunity to increase your credit score by paying the instalments on time. 

5) Documentation:- The entire documentation process of a personal loan is very quick and easy. You'll have to attach the application form along with some essential KYC documents required for verification. Unlike any other loan, you don't have to submit a bundle of paperwork to get your loan approved. 

Essential factors of Personal Loan

1) Credit Scores:- It is a three-digit number that will determine your creditworthiness. A lot of banks will use your credit score as a primary criterion to accept your application process. A high credit score can help you to get a lot of benefits. Your credit score will be a factor to build trust between you and your lender. 

2) Employment:- Personal loans only accept the application of employed individuals. So you'll have to be employed in order to get your loan approved. Your employment status will play a significant role in determining your loan approval. A work experience of a minimum of one year in your profession is required. 

3) Income:- A minimum income of INR 10,000 is required to get your loan approved. Your income will also plays a vital role in determining your application approval. If you're applying for a high loan amount, then you should have an income capacity to repay the loan amount. So be sure to check your income before making a decision regarding the loan amount. You can use some online tools like the HDFC personal loan calculator.

The personal loan application process

1) Firstly you'll have to apply for a personal loan facility. You can use either online instant personal loans or offline methods.

2) You'll have to fill the entire application form. Complete all the necessary details required by the bank. 

3) Then you'll have to submit some essential KYC documents along with some documents like: 

a) Address proof - Banks will ask you for address proof like Electricity Bill, Telephone Bill, Postpaid Bills, etc.

b) Income proof - Payslip, Form 16, ITR, Tax Challan, etc.

c) Employment status - You'll have to show a confirmation of your employment. For that, you'll have to submit an Employer Certificate, Offer Letter, Certificate of Experience, etc.

d) Identity proof - An identity proof like Aadhar Card, Pan Card, Passport or Driving License.

4) After you've submitted all the documents, the bank will verify your documents to check whether or not the application should be approved. 

5) Once the bank approves your application, the loan amount will be instantly disbursed to the borrower's bank account. 

This entire process of personal loan will take 2 to 5 business days. A lot of banks provide the facility of personal loans. To compare all the options and then choose an ideal bank for a personal loan. 

Also Read:- HOW TO CHECK THE CREDIBILITY OF A LENDER BEFORE AVAILING A PERSONAL LOAN 

Personal loans are considered one of the best ways to fulfil the need for funds for any purpose, whether financing your children’s education or planning a holiday with your family. Personal loans can provide you with a solution to everything without much tension and stress. Personal loans are considered best to overcome any finance-related problems. Everybody is well aware of how to get a personal loan. Still, not everyone knows how to avail of a personal loan at low rates of interest as the rate of interest is the only factor that can change your amount of personal loan, the tenure of the loan etc., substantially.

So, let us learn some ways by which one can avail of a personal loan at low-interest rates as below:

• Compare lenders to get the best offer: A person can successfully avail of a personal loan at low-interest rates if he takes the loan by conducting prior research. And good research can be done only if you compare the personal loan lenders in the market to shortlist a loan opportunity with a reasonable rate of interest and convincing features. One should take their time to conduct this research to get the lender with the terms and conditions that suit you best. 
• Qualify based on your professional credentials: If a person has a good job and earns a hefty salary, he has a better chance of getting a personal loan. This puts the borrower in a better position to negotiate the rate of interest for the loan. In addition, if the company in which the borrower is working has a good name, then that makes it even better for you to convince the lender to cut the rate of interest since your company’s good name can give him the surety that you will somehow manage the amount to repay the loan and monthly instalments.
• Maintain a good credit score: Your credit score indicates your record of handling your credit. It indicates how you tackle these credits. A good credit score has to be around 700 or 750, making you an appropriate candidate for availing of a personal loan. And it has always been, the higher the credit score, the better your chances are to get a personal loan. This is because the loan amount, interest rate, and repayment terms are all decided based on your Personal Loan Eligibility and credit score. And if you have a good credit score, it becomes easier for you to negotiate the terms of the interest rate for the personal loan.
• Look for seasonal offers: Most lenders and banks notify their customers about seasonal offers through mails and SMS. So one should keep a check on these offers to get the most favorable deals out of them. These offers are presented for a limited period, so they should be grabbed at the earliest whenever one finds a suitable one. Moreover, most of these discounts come around festive seasons so that people can keep an eye on such emails and messages at that time.

These are some critical points where you can try and get a low interest rate on your loan by keeping these points in mind. You should always try to maintain a good credit score and employment status to get a low-interest rate on your loan. Not only it will get you personal loans easily but also keep your credit scores appropriate for future needs.

Several banks offer you a personal loan, and as mentioned above, one can always check, evaluate and compare these various banks and financial institutions before concluding choosing one of these. One can also check their monthly instalments by the SBI Personal loan calculator to get an idea about the monthly reimbursements and choose the most suitable rate of interest that is convenient for them to repay. Other factors have a vital role in deciding the interest rate, and one should study these factors to avoid any sort of casualty.

Read More:- Personal Loans Have High Interest Rates 

A personal loan can be a great financial help in the time of financial crisis. It is an unsecured loan and it does not require any collateral against the loan taken from banks and non-banking financing companies(NBFCs). The application process is quite simple and requires minimal documentation. For more information regarding personal loans, one can check the website or app of the financing companies. An applicant should be really careful while availing loan. One should keep in mind a few points before availing loan.

BELOW ARE LISTED 8 POINTS TO HELP YOU WITH YOUR DEBT BURDEN :- 

Make A List Of Your Debts And Assets:-

One must gather the information of all the debts taken from the banks and non-banking financing companies(NBFCs). Calculate the monthly debt which is to be given to the bank. One must also keep a close track of the income. Distribution of income for various purposes is important. Try to save money by avoiding unwanted purchases. Always save money to pay your debts. Try paying all your debts timely to avoid future losses. Always calculate the minimum monthly payment accordingly. Pay the EMIs to the bank timely as paying late can reduce your credit score. Making a list of debts will make your work easier.

Follow A Strict Budget :-

Following a strict budget helps you save a lot of money. Calculate the monthly spendings. Calculate the monthly spending on groceries, medicines, electricity bills, and many more things related to daily needs. Avoid buying anything unnecessary. Save money to clear all your monthly debts. If possible save a little more money and prepay your loan. Prepayment of a loan can help the applicant decrease the burden.

Don't Over Borrow:-

An applicant is always recommended to take a loan as per the need. Try not to take unnecessary loans from banks and non-banking financing companies(NBFCs). Try not to over borrower. Make a proper list of all our needs and borrow from the bank accordingly. An applicant is recommended to take a loan seeing the financial flow. Overborrowing can increase the debt leading to a bad credit score. Too many of loans like Personal Loan or credit cards can be fatal.

Make A Debt Repayment Strategy:-

Make a step-by-step repayment strategy. First list all your debts taken in one place and then calculate the entire amount to be paid to the bank or non-banking financing companies(NBFCs). Making a repayment strategy can make the work easier for the applicant. Following a proper repayment strategy is important for the fast repayment of the loan.

Consolidate Debt:-

Debt consolidation is a smart move. Try to consolidate the various loans taken from the banks and non-banking financing companies(NBFCs) into one single loan. Data consolidation can help you decrease the internet rate on your loans taken.

Pay Your Credit Card Dues:-

Always try to pay all your dues timely. Paying credit card dues timely is important. The interest rate on credit card dues is higher so clearing all the dues timely is important. Paying your credit card bills timely can also help you increase your credit score which can help you in the future for availing of loans.

Increase Repayment With A Rise In Income:-

Try to increase your repayment with the rise in income as this can help in fast repayment of the loan and will also decrease the unwanted burden. This is a very easy way to pay your loans faster. Make sure to save money from your income and prepay your loan. Fast repayment of loans can be really helpful in maintaining a good credit score.

Drop Expensive Habits:-

Try to avoid buying expensive things until the repayment of the loan is done. Reduce your subscription-based expenses. Cutting down unwanted expenses can help you in saving a lot of money. Make it a priority to repay your loan timely. Make sure to cut your expensive habits until the repayment of the loan is done. An applicant can get a personal loan from various banks and non-banking financing companies(NBFCs). PNB Personal Loan can be easily applied online as well as offline. The bank is recommended to get a personal loan. An applicant can avail of various schemes on a personal loan by applying at the bank. 

Must Read:- How to obtain a PL of more than 10 Lakh 

A personal loan is an unsecured loan that the world’s population has been making use of for more than half a century. And the need for it is only growing like five or even two decades ago, people are no longer required to travel miles and negotiate terms with a banker to sanction money. With the tremendous growth of technology and the ever-present 4G internet, you can avail of this loan online with no trouble at all. The terms and conditions with the factors and eligibility criteria are provided on the official website of the bank or NBFC you want to avail loan on. Online processing of a personal loan 

• Open the official website of the bank or NBFC and select a personal loan application online from the menu bar.
• The option leads you to an application page that asks for your name, age, phone number, address, Pincode, mail id with other basic details.
• The second page asks for your monthly income, banking details, CIBIL score, loan amount required, tenure period, and using that the page displays your monthly interest amount 
• After that the screen for documents is presented, where the basic documents of you are asked like ID proof, residence proof(PAN card, Voter ID, aadhar card, passport, driving license(any one can be submitted)), income proof(ITR, form 16, salary slips), employment proof(employee id). Bank statement(account book). You have to scan and upload all the original documents properly.
• After that submit your application.
• Upon receiving the application, the bank verifies all your credential and approves if it has complete trust and satisfaction.
• After the approval, the finance sends you a digital document detailing the loan and specifying the additional charges like preclosure fee, processing charge, and taxes and requests for your digital signature.
• After the signing, the money is then disbursed within several hours or at the most in 2 days.

Axis Bank personal loan details 

Axis bank is a reputed bank that has branches all around the world with millions of customers availing of personal loans regularly. The bank is a private company with high-end people in the business as account holders. The ratings of the bank are impeccable and the loan offers are affordable.

Eligibility criteria

• The age requirement to avail of this loan is a minimum of 21 years with a maximum age of 60 at the time of maturity of the personal loan.
• The applicant must be a salaried professional (private or public sector).
• The minimum salary of the applicant must be Rs15,000per month.

Axis Bank loaning details

Axis Bank personal loan offers both online and offline services. The loan amount the bank offers for a personal loan is a minimum of Rs 50,000 up to Rs 15 lakh. The tenure of the loan lies in the range of 1 year to 5 years with minimal documentation. The interest rate of the personal loan varies from 10.49% per annum to 21% per. The bank also charges various other taxes and other charges. The processing fee is one among them, that is charged for the processing and approval of the application. The fee in Axis Bank is Rs 500 plus GST. Preclosure or foreclosure is another such charge that is incurred if the applicant closes the loan before the end of tenure. The charge is 5% for 0 to 12 months, 4% for the second year, 3% for the third year, and 2% for the last two years.

Conclusion  

The personal loan although easy to avail still needs the loan to be paid back by the applicant. The CIBIL score of the applicant depends gravely on the monthly instalment of the loan, if the bank or NBFC sees regular on-time payments the credit score increases else the credit score decreases hindering the possibility of availing of loans in the future. For any further information, the contact details of the bank are on the official website.    

Also Read:- Can I get a personal loan without salary slip? 

WHAT IS A PERSONAL LOAN?

A personal loan is used for personal purposes or to fulfill someone's personal desires. For instance, it can be used if you are planning for a vacation, or if you want to plan a big wedding or even, if you are planning to buy a car. It is only upto you why you are taking that loan. Some of the banks do ask you the purpose of availing a personal loan while others don't.In the whole process of availing for a personal loan, you need to apply for the same and then, provide all the necessary documents to the bank. After the successful verification of your documents, the loan will be finally transferred to your bank account. After getting the loan, you can use the money for whatever purpose you want, and after that, you have to repay the loan to the bank or to the money lender with an interest rate on it. The money can be paid back in the form of equated monthly installments (EMIs). 

Different banks offer different interest rates on different loans. So, if you want to apply for a personal loan or any other loan, you should compare and contrast different offers by different banks, the features of a loan, benefits, interest rates, extra charges and at the end, decide the one which you feel is the most comfortable. The amount of money can be calculated with the help o a personal loan EMI calculator. You just need to put the values of the amount of loan, rate of interest, tenure of repayment and then, you will be able to get the amount of the EMI that you will need to pay every month. Indiabulls personal loan provides an easy procedure to avail for a personal loan.

THINGS YOU NEED TO DO IF YOU WANT TO AVAIL A PERSONAL LOAN: - 

1. Check Your Credit Score:- The credit score reflects your creditworthiness.  It tells how you have managed your credits in the past. An ideal credit score is around 700, and it makes a candidate good for a personal loan. The higher your credit score is, the better it will be for you. The loan amount, interest rates, repayment terms are all decided based on your credit score.
2. Compare Lenders To Get The Best Offer:- You need to research all the important aspects before applying for a loan, and even a little research goes a long way. You can compare the different personal loans in the market or present them online on the banks’ websites and compare the different interest rates. By this, you can choose the loan which has the best interest rate and features. It may take some time, but you will surely make the right choice of loan. 
3. Check Your Eligibility:- As mentioned earlier, good research will help you in the long run. Once you have chosen the loan, you have to check the eligibility criteria. If you are eligible and are fulfilling the criteria, then you can apply for your loan.
4. Look For Seasonal Offers:- The money lenders and the banks notify their customers about the special offers through emails and SMS. You have to keep a watch for these offers if you plan to take a personal loan  , and you can get it more affordable. These offers help you as they allow you to get limited period discounts on the interest rates.
5. Qualify Based On Your Professional Credentials:- If you are a person who works for a reputed public or private sector or draws a high salary, you are a stable candidate in the eyes of the creditor. You can thus use your professional credentials as your advantage to negotiate a lower interest rate. If your company’s reputation is good or the importance of the company in which you are working, it can help you get a loan with a lower interest rate. This is because the lender will be assured that you have the financial means to make the monthly EMIs.

Personal Loan might be a good alternative if you need cash for a home improvement project or other considerable cost and can afford repayment. Most personal loans are unsecured (lenders do not require collateral) and have attractive interest rates and no hidden fees.

A Credit Score typically ranges from 300 to 850, which is devised on the basis of one’s income, repayment capability, past transactions or debt obligations. The five factors include payment history, the amount owed by an individual, length of credit history, credit mix and information on new credit. 

An individual can opt for two types of credit accounts as Installment credit or revolving credit. Instalment credit is a type where a fixed amount of debt is availed and has to repaid monthly over fixed instalments. Revolving credit is a type of credit where primarily credit cards are involved. One can spend an amount up to the credit limit, and particular repayments have to be done on the expenditure of the credit. Revolving credit keeps fluctuating over the period as they don’t have a fixed term. 

What Does Impact Having Multiple Accounts Have on My Credit Score?

One of the most popular elements used to compute credit scores is credit mix or the diversity of your credit accounts. It is also one of the most commonly neglected by customers. Maintaining many sorts of credit accounts, such as a mortgage, personal loan, and credit card, demonstrate to lenders that you can manage many kinds of debt simultaneously. It also allows them to gain a better picture of your finances and capacity to repay loans.

While having a less broad credit portfolio will not always result in a worse credit score, the more forms of credit you have as long as you make on-time payments the better. Credit mix accounts for 10% of one’s Credit Score and may be a deciding factor in achieving a high score.

What Can Affect Your Credit Score? 

Some features can vastly affect one’s credit score either positively or negatively. The following factors include missed repayments, too much utilization of credit, account defaults, too many credit requests. Missed repayments Payment of history towards repayments has the most impact on the Credit Score. Even 30 days late repayment can have a negative effect. 

Too much utilization of Credit Too much utilization can result in a red flag on your credit report. Having a flag on your credit report is a sign of adversity. The average total amount of revolving credit by total credit limits is calculated as Credit utilization. 30% of the Credit score depends on this. Account defaults. The information about foreclosure, bankruptcy, settled accounts, repossession, or charge offs can negatively impact your credit report. This can have an ever lasting effect on one’s credit report. Too many credit requests When availing of a loan, a credit inquiry, also called a hard enquiry, is made on one’s credit report by the lenders. These inquiries details are reflected on one’s credit score and can stay up to two to five years and can also slightly bring your score down. Lenders always review the number of hard enquiry made on your report, and too many requests at the same time will make a bad impression of your eagerness to obtain a loan. Too many enquiries in a short period of time may indicate that you are in financial distress or that you are being rejected for new credit.

Why are personal loans more beneficial? 

An India Bulls personal loan may be appropriate for you if you meet the following parameters :-

1.) You have a good credit score, which will assist you in qualifying for a cheap interest rate.

2.) Your budget allows for a new monthly payment.

3.) If you wish to repay several high-interest loans via debt consolidation.

4.) Your debt-to-income (DTI) ratio is less than 36%.

5.) You will not be eligible for a credit card with a 0% APR.

Thus a Personal loan is a very profitable option to obtain in minimal time with less documentation. 

What is a personal loan? 

A personal loan is an unsecured loan that can be used for short or medium-term fund requirements. You can use the amount you get from a personal loan for various purposes like wedding, medical expenses, child's tuition fee, plan a vacation, debt consolidation or miscellaneous expenses. 

You can easily apply for a personal loan at a bank or NBFC (Non-Banking Financial Companies) in India. This increases the risk chance that you will face in the near future. So it's advisable to consider all the factors that affect the personal loan first and then make any decision regarding it. 

Factors to consider while applying for a ideal personal loan:

Credit Score:- 

It is a number between 300-900 that determines your creditworthiness. The higher the number is, the more creditworthy you are. The most accepted credit score is 750 or above. So it's essential to maintain your credit score. If your credit score is high, then your personal loan application will be quickly approved. But if your credit score is low, then a lot of banks will reject your application. However, some banks allow an individual with a low credit score to apply for a personal loan, but you'll have to pay a high interest rate on monthly EMIs. 

Loan Amount:- 

Deciding a loan amount is the most basic requirement for a personal loan. You'll have to decide the loan amount that you need. A lot of banks (like Dena bank personal loan and Canara Bank) do offer more money than required. So don't fall into that trap and only borrow the money that is needed by you. Because you'll have to repay that amount along with the personal loan interest rate, so it's easier to choose a loan amount that will be repaid in no time. However, banks allow you to take loan amounts according to your income. So if your income is low, you won't be able to apply for a high loan amount.

Repayment:- 

Customers have the flexibility to choose the repayment tenure and structure according to their income. Banks offer a lot of repayment structures so that you can pay your loan amount along with the interest rate within the loan tenure. However, it is advisable first to calculate all the expenses and then deduct them with your income to choose your EMI amount. With the help of the EMI amount, you can select a repayment structure that is best for you. It is ideal for keeping your loan tenure as short as possible because you might end up paying more money as interest. 

Personal loan interest rate:- 

The interest rate usually differs from one bank to another. So different banks have different interest rates for various loans. Interest rate is the primary source of profit for banks. It's the extra amount they take to give you money for the loan. So it's essential to choose a credible bank that provides a low-interest rate. The Personal Loan Interest Rate usually varies between 8%-18% per annum. So it's better to compare all the choices and then choose the one that provides the lowest interest rate.

 Eligibility Criteria:- 

The eligibility criteria also differ from one bank to another. So it's essential to check whether or not you fit into the bank's eligibility criteria perfectly. There are online tools like 'eligibility criteria calculator' that are provided on each bank's website. You can use that tool to check whether or not you're eligible to apply for a personal loan at your bank. 

Conclusion:-

It is crucial to choose all the options available and then choose the best one for you. So it would be best if you chose all the banks and then select the one that has more credibility and provides a low interest rate. Many banks offer various unique facilities, so do some research and then choose the right lender for you. 

Is your cash flow sinking? need help? personal loans are available, but with give comes take, as the interest rates are surging and the economic prices are flooding, you are finally only adding interest on interests and all that seems to do is dent your account irreparably which is a bad place for anyone to be. A personal loan calculator is available on most banks and NBFCs official websites to give you a crystal clear idea of what you are dealing]g with. Personal loans are beneficiary with cross lines and limits that if crossed might do you a great job of hindering your future possibilities of availing a loan. But, it can’t be the only way to lend you resources right, without maxing out your account? And that’s is why you have more than one option to fend for in a highly legit way. Here are a few other options to swell your account.

Loan against property: 

(LAP) Property loans are available in all banks and Non-Banking Financial Institutes(NBFC) where you can place your property as collateral and receive about 80% of the property’s value, as the rate increases the value of your property floods. The property can be land or home.

Loan against Public: 

Provident Funds(PPF): With very minimum documents and without wreaking your PPF agreement an applicant can avail a loan on this for a maximum tenure of 2 years and can avail another if they are in the period between 3years-5years if and only if the loan pays the first loan on full.

Loan against Fixed deposit: 

Customers who have fixed deposits in the bank avail  this loan where the bank allows the customer to take 90% of the maturity amount as principal amount, however, to avail this loan the customer must visit the bank in person.

Loan against Gold: 

Gold loan or loan against gold is a type of loan where the gold articles act as collateral to the principal amount. Few banks and NBFCs don’t accept gold coins or bars but other than that all kinds of ornaments are permitted and considerably has a lower interest rate. The bank or the NBFC has the right to auction the gold article if the consumer refuses to pay the monthly instalments on time or doesn’t pay the principal.

Loan against insurance policies: 

Insurance amount can be used as collateral to avail this loan. Banks and financial institutes provide up to 90% of the insurance amount and have low-interest rates. This loan can b paid off at any time during the insurance time and if not paid the banks and NBFCs automatically detect the due money.

Loan against Employee Provident Fund:  

The maximum loan tenure is 24 months and you must’ve had the Employee Provident Fund(EPF) for a minimum of 3 years. You can avail up to  90% of the fund.

Loan against mutual funds: 

A loan on mutual funds can be availed after making an agreement with the lender meaning you should mortgage your unit. A margin is the  principal a bank sanctions on the mutual funds which are always less than the market value of the mutual fund.

Loan on shares:

Loans can be availed on the shares you invest in a business or a trust or society etc.., only if the company has approved securities and each bank has its own list of the eligible securities. The principal amount depends on the security and the value of the share. But, in general, the granted amount is much less than many other loans.

Conclusion:

Indian Overseas Bank personal loan is a profitable loan that has affordable interest rates and flexible tenure in addition to all the above-mentioned loans. However, any loan availed should be used wisely and paid shrewdly without dues on the given date.

Also read this: Different Sub-classes Of Gold Credits 

When a person needs a dynamic loan that has no limit on the ways it can be used for and is user friendly they go for a Personal Loan. It is one unique offering that helps in providing a lump sum amount of money that can be used by the borrower. The borrower is not bound to use the loan to purchase a car like in a car loan or consumer goods as in the case of a consumer good loan. This loan also offers loans with any collateral which makes it the most preferred type of loan in the country. Certain things have to be considered if you are going for this type of loan. Even minute differences can save you or cost you thousands. 

This type of loan mainly depends on the following factors -

• Principal Amount :
  It is the amount of money that the borrower is looking forward to borrow from the bank. The lower limit and upper limits of the amount that can be borrowed varies from bank to bank and also on the eligibility of the borrower. The interest is charged on this principal amount.
  
  
• The interest rate charged :
  The banks don’t just give out Personal Loans for free or non-profit purposes. The banks charge a sum of money known as interest on the principal amount. This interest is not to be paid apart but is included in the EMI’s (Equated Monthly Instalment). These rates vary from bank to bank and person to person depending upon the bank’s policies and borrowers eligibility. A bank may charge higher interest rates if the loan is not secured.
  
  
• Tenure of the loan :
  The tenure means the time limit for which the loan is needed. This is important as the interest charged by the bank depends on that. Different banks have different minimum and maximum tenure limit. The longer tenure of the loan may attract higher interest rates.
  
  
• Credit Score :
  A credit score is a three-digit code that ranges from 300 to 900. It is the score that is given to the person depending on their earlier lending habits. A good credit score will attract a better interest rate from the bank.
  
  
• Collateral factor :
  This factor depends on the factor of risk. As most of the personal loans are not secured with collateral the interest rate is higher than usual. On the other hand, if any collateral can be provided to the bank of complete or partial value when compared to the principal it may attract a better deal for the borrower.
  
  
• Miscellaneous factors :
  There are also some miscellaneous factors like age. Many banks offer personal loan to people of or above the age of eighteen and also some offer personal loans to individuals of age twenty one or above.

Thus these six points have to be considered while opting for a personal loan so as to get the best possible loan offered to you. Indian Bank Personal Loan is an offering by the bank in the personal loan segment. The bank offers loan amount of up to 20x times the gross monthly salary of the applicant. The loan tenure that they offer is up to 7 years and can be paid back in easy monthly EMI’s. The bank has been offering one of the fastest and easiest personal loan approval processes for years now and is trusted by lakhs of people in the country. They also have special schemes for pensioners and defense personnel.

Conclusion -

A personal loan of being such dynamic in nature demands to consider some other factors into consideration before opting for a personal loan. These factors not only can save you thousands of your hard-earned money but also ensure you get the best possible offer for your convenience.

Must Read :- Things To Consider Before Obtaining A Personal Loan