Blog #personal loan EMI calculator

Loans are financial help provided by banks and Non-Banking Financial Companies (NBFCs) to customers for over several decades. The Reserve bank Of India authorizes these loans sanctioned by them, and a personal loan is one such loan that is categorized as unsecured. An unsecured loan doesn’t require a physical asset to be pledged to avail the loan, whereas a secured loan needs an asset. Gold loans, car loans, home loans, business loans are some of the secured loans in the finance market. A personal loan is a generic loan. Therefore, a customer can take out this loan for any kind of reason and purpose.

A personal loan aside from availing for emergencies or other financial requirements can also benefit from this loan to make more money. For instance, you can take out this loan to start a business or expand one or invest in one(shares). With the help of the sanctioned loan amount, you could make the business prosper and increase your credit outflow and pay off the personal loan efficiently. Banks and financial institutes also provide prepayment options to repay your loan amount with interest before the end of the tenure. The non-requirement of the collateral with its exuberant benefits and features has substantially increased its demand over the years. The personal loan can also be availed for home renovation, car purchase, appliance purchase or scientific research.

How can you avail a Personal Loan?

A personal loan only requires minimal documents like ID proof, address proof(Aadhar card, voter Id, passport, driving license or PAN card), Income proof(salary slips, ITR, form 16, etc..), employment proof( employee office id or business proof), and bank statement. With these documents provided that they are unexpired and completely government-authorized, you can avail the loan both in online and offline mode.

By opting for online mode, you fill in the necessary details(name, age, address, etc...), scan and upload the required documents, fill in the loan details(loan amount, tenure and interest amount) and submit the application form. And by opting for the conventional offline mode, you visit the bank or financial institute in person and submit the application form. Either way, after complete authentication and verification of the applicant and the application, the personal loan is sanctioned. The loan amount is disbursed immediately after its approval in either mode.

Personal loan benefits and features:-

The personal loan processing is exceptionally rapid, and to avail financial help from the authorized lenders without pledging asset as collateral, the personal loan is the best option. The loan amount of a personal loan is pre-decided by the banks and financial institutes and varies from Rs25 thousand to Rs40 lakh. The loan term of a personal loan is a minimum of 12 months and 60 months. The personal loan interest rate depends on the loan amount availed, and tenure opted. The rate starts at 9% per annum in most banks and financial institutes.

A Personal Loan EMI Calculator can be used to calculate and know all about the interest rates or NBFC online conveniently. The processing fee of a personal loan is incurred for the processing and approval of the loan application. The charge is around 2.5% of the loan amount. The prepayment or pre-closure charge is procured if the borrower closes the loan account before the decided end of the tenure. The prepayment fee depends on when the borrower closes the loan during the tenure. It is NIL if one prepays during the end of the term(last six months) in most banks and NBFCs and is up to 6% of the outstanding loan amount in the initial or mid-stage of the loan term. 

HDFC is a highly reputed bank with millions of customers and branches set up all over the world. The personal loan in this bank is imminent and has proficient features. The HDFC Personal Loan Rate Of Interest starts at 10.5% per annum, and the interest rate calculator is available on its official platform.

Must Read:- Is It Possible To Take More Than One Personal Loan At The Same Time? 

A personal loan does not require anything to put up as a collateral deposit in the form of security. This makes the personal loan unsecured. Therefore a good CIBIL credit score is very important to get a personal loan. But before approving the loan application, the lending institution may ask for a guarantor who will make good of the loss in case the borrower makes defaults. It is the Bank's way of ensuring money is in safe hands and it will be duly repaid on time. The loan amount must be repaid in monthly instalments, which can be calculated with the help of a Personal loan emi Calculator.

There are numerous reasons why banks ask for a guarantor like a borrower’s credit score does not meet b requirements, if the borrower is doing a transferable job, if there is job's instability from the borrower's end if the income of the borrower is unstable and he has a poor academic background. Moreover, the requirement of a guarantor can be a part of the lending parties rules and regulations. This makes the guarantor a mandatory part of loan approval. A guarantor becomes personally liable for the personal loan taken equally like the principal borrower. This means to consent to the Bank to be a guarantor will put a financial burden on the guarantor, as he will be the backing the borrower in case of default. In case of default of the principal borrower the banks usually send a notice to the guarantor to clear the outstanding loan amount. If the guarantor fails to do his job, the Banks treat him as a wilful defaulter. This can seriously affect the credit score and credit rating of the guarantor.

Before Becoming A Guarantor A Person Should Take These Factors Into Consideration:-

• It does not matter for whom he is choosing to be a guarantor but he must always check his creditworthiness before appearing as a guarantor for him. If the borrower has a stable monthly income, there are no issues to become a guarantor.
  
  
• People who are planning to apply for a loan for themselves should not choose to be a guarantor for someone else. This can affect the eligibility of the loan that the guarantor wants to take.
  
  
• Additionally, the guarantor must know why the borrower wants him to become a guarantor. Mainly, the borrower’s poor credit score is why the lending Institutions ask the borrower to get a guarantor against a Personal Loan.
  
  
• Before consenting to be a guarantor one must have a contingency plan. The personal loan amount should be within the repayment capacity of the guarantor because if the borrower does any default,  the burden is entirely upon him.
  
  

A guarantor is an additional layer of security for the creditor. Understanding the financial and non-financial implications of a personal loan is very important for a guarantor. The financial liability that a guarantor and principal borrower has is almost equal. Therefore the legal obligation to collect the outstanding money from the guarantor is a right that the lending institution has if the principal borrower fails to pay the loan amount. In case of default, the guarantor’s monthly income and other assets can be attached to the loan liability. Axis bank personal loan status or the personal loan status provided by other banks can help the principal debtor as well as the guarantor to understand the position of personal loan application done. Being a guarantor is not a bad thing but one must keep in mind a few factors before becoming a guarantor. A particular loan product must be chosen after doing thorough research. The above-mentioned points can help a guarantor to understand the credibility of the borrower and thereby choose whether he wants to become a guarantor for him or not.

Must Read:- How to obtain a joint Personal loan 

Personal loan protection insurance protects you against defaulting on your debt due to unforeseen events such as death, unemployment, or medical issues. Your dependants or family will not be responsible for paying back the personal loan. You have the option of paying the charge in addition to your personal loan EMI payments. You have the option of paying the premium all at once or in equal payments. Personal loan protection insurance protects you against defaulting on your debt due to unforeseen events such as death, unemployment, or medical issues. Your dependents and family will not be responsible for repaying the personal loan.

Few things need to consider 

1) Make sure you can afford it: It will be an additional expense to pay your personal loan insurance premium. As a result, you must determine whether you are financially capable of paying the premiums. Make room in your monthly budget for the premium, which can be paid in instalments or in one large sum. Paying in instalments, on the other hand, attracts interest, making the procedure more expensive.

2) Examine the many personal loan insurance options: When a bank representative informs you about this alternative, personal loan insurance is frequently a last-minute purchase. However, because it was a last-minute buy and you weren't able to compare alternative offers, this could end up being a costly purchase. The premium rate offered varies from one company to the next. As a result, a comparison of different offers is required. Many loan insurance policies, for example, do not cover scenarios including job loss. If you fall within the designated category, you will not be able to take advantage of the offer.

3) Understand your personal loan insurance policy: Before purchasing personal loan insurance, it is a good idea to familiarize yourself with the terms of service. This can assist you in avoiding circumstances when you are unable to make a claim on your insurance. Indiabulls is one of the country's most popular home loan lenders. Indiabulls personal loan customer care number is 1800 200 7777.

4) Examine the pre-closure fees: When you foreclose on a loan before the agreed-upon term, you are likely to forfeit the insurance advantages that come with it. As a result, you should know if you will receive a refund or whether your premium will be cancelled. Getting personal loan insurance is usually a good idea, as long as you do your homework on the conditions of service.

Benefits

Some banks offer loan insurance with personal loans, however, it is up to the borrower to accept or decline the policy. Purchasing a debt protection insurance plan has various advantages, including: Loan insurance programmes minimise a borrower's outstanding loan and cover his or her monthly loan payments in the event of unforeseen occurrences such as job loss, accidental death, or temporary incapacity. Under Section 80C, several loan protection insurance programmes may give tax benefits. Money-back plans are available on some personal loan insurance policies, in which the customer receives a specific sum at the end of the policy. Personal loan EMI calculator  is very helpful in this case, it shows us the EMI which we have to pay monthly out of our monthly income. It helps you to prepare a budget which helps in maintaining all the expenses along with EMIs.

Must read:- What Should A Borrower Do If They Can’t Repay A Personal Loan? 

A personal loan is always a convenient alternative for being pocket-friendly, with cheap instalments and providing a speedy disbursal of loan amount with nominal official paperwork to be done against it.  Moreover, one can pay it back over time. Moreover, it works for the borrower to build credit and make it manageable to reduce the unsettled debts rate by extending competitive interest rates and adjustable borrowing limits. Wedding loans, home renovation loans, travel loans, medical loans, debt consolidation loans, and small personal loans are examples of personal loans.

A person who misses a payment on his loan or other debts for more than a billing cycle is considered a loan defaulter. Missing loan payments on time is not a healthy financial habit, and non-repayment can cause severe repercussions for credit score. Managing all debts can be a very tedious task, and it is easy to fall into the debt trap as there are so many loan products in the market. Making a loan default is an unpleasant experience that brings down the credit score of the borrower. An emergency fund should always be ready to deal with any financial emergency as a defaulter does not get a loan quickly. To avoid defaulting, it is best to choose a personal loan with a low interest rate provided by different Financial Institutions. But there are some alternatives available to the borrower for repaying a personal loan after he defaults. For example, HDFC Personal Loan Interest Rate, SBI personal loan interest rate.

Punjab National Bank personal loan interest rate, etc. There can be genuine reasons for a person to do a loan default, but it always has a long-lasting effect on the financial portfolio of the borrower. Further, it damages their credit score indicating poor debt management by him. Among various options available to secure funds in case of emergency needs, a personal loan is always an option as it is not that rigid regarding the eligibility requirements of the applicant.

Lenders or lending institutions consider the repayment capacity by checking the CIBIL credit score before authorizing him with a personal loan. A poor CIBIL credit score not only imposes rejections but also restricts the power of purchasing, ultimately affecting the standard of living. Though it is not very easy to get a personal loan with a low credit score or a defaulter, it can be availed in some cases.

The defaulters of a personal loan have some alternative to repay the loan amount, and the most common option is to take a secured loan like a gold loan and repay the personal loan. Another option can be to convince the lending Institution of the creditor to restructure the loan with an extended period of repayment and a low rate of interest. Even some personal borrowing can also be done to repay the loan from friends and relatives. Finally, apply for another loan with a guarantor or co-applicant with a good CIBIL credit score and pay off the unsettled dues with the generated loan amount.

A good market study and getting a cheap personal loan with low interest and nominal processing charges are always recommended. It is always recommended to take a personal loan after accessing all the factors of it. It should always be estimated first whether the amount borrowed for the personal loan can be repaid within the stipulated time or not. The borrower must have a stable and steady income and not many other debts previously piled up. The loan applicant must do proper financial planning of his monthly payments. The EMI that has to be paid for a personal loan can be evaluated before taking up the loan with the help of a Personal Loan EMI Calculator.

Read More:- Documentation Process In Personal Loan 

Personal loans can be availed from banks and other financial institutions in India for any personal need. These loans are unsecured and do not require a lot of documents and effort for the application procedure. Personal Loans can be used for purposes like educational requirements, home renovations, a purchase, traveling, wedding ceremonies, etc.

Personal Loans have a higher rate of interest than other loan schemes offered by Banks and financial institutions generally starting from 8.95% per annum in India. These loans are unsecured and that is why these loans have a higher rate of interest than other loan policies offered in India. The high interest is resisted by many people as it increases the monthly EMI amount that has to be repaid by the borrower to the lending bank.

The rate of interest for some Indian Banks offering Personal Loans is given down below :

a) State Bank of India:       9.60% p.a. - 15.65% p.a. 

b) Canara Bank:                 12.05% onwards 

c) ICICI Bank:                     11.25% p.a. - 21% p.a.         

d) HDFC Bank:                    10.75% p.a. - 21.30% p.a. 

e) Bank of Baroda:             10.50% p.a. onwards 

f) Kotak Mahindra Bank:   10.50% and above 

These interest offered by Banks and financial institutions are usually higher than that of the other Loan schemes like Home loans and Car loans offered by the Banks or financial institutions. The unsecured nature of these loans makes the application procedure of these loans a bit tougher than other loans that require collateral as security from the borrower. The unsecured feature of these loans also makes the rate of interest charged for these loans by Banks and financial institutions higher than other loans. 

A personal loan EMI calculator available on several websites online can be used to estimate the repayment EMI amount to be paid back to the lending bank every month. These calculators prove to be extremely beneficial in the determination of the repayment amount to be paid each month and in creating a budget for the future. The details required to use these calculators include the Loan tenure, interest rate chargeable, and the loan amount,

The Eligibility criteria for Personal Loans in India is given down below:

1) The applicant should be a residing citizen of India then only one can apply for a personal loan in India.

2) The applicant’s age should be between 23 to 55 years to apply for a personal loan.

3) The applicant should be self-employed or employed by a government or private limited company.

4) The credit score of the applicant should be at least 750.

5) The applicant should have the required documents for the application procedure for a Personal Loan.

Documents Required

The Documents required for the processing of a Personal Loan in India include the following:

a) Proof of identity (copy of passport/voter ID card/driving license/Aadhaar) of the applicant 

b) Proof of residence/address (copy of passport/voter ID card/driving license/Aadhaar) of the applicant.

c) Bank statements of the past 3 months (Passbook of previous 6 months) of the applicant.

d) The latest salary slips/current dated salary certificates are attached with the latest Form 16 of the applicant.

e) Few Passport sized photographs of the applicants.

f) Documents of employment of the applicant.

Several banks may demand certain additional documents as per the policy of the Bank. Do check out all the requirements and the procedure of approval from various banks before applying for a Personal Loan. 

Banks have their unique criteria for eligibility for Loan schemes. The rate of interest offered by different banks also differs from each other. Some banks provide lower rates of interest for Personal Loans than other Banks. 

Such schemes that provide a good deal for a personal loan offered by banks and financial institutions in India is given below:

i) Bank of Baroda Personal Loan

ii) Fullerton India Personal Loan

iii) ICICI Bank Personal Loan

iv) Punjab National Bank Personal Loan

v) State Bank of India Personal Loan

vi) Syndicate Bank Personal Loan

vii) Bank of India Personal Loan

Must Read:- Which is a better gold loan or a personal loan? 

A personal loan has been one of the most vital forms of service provided by banking institutions among all the loan types. During this pandemic time in the initial period of the infectious disease, when there were frequent lockdowns, people used nearly 70% of the services in the form of personal and gold loan only. A personal loan is the type of loan where no collateral security will be placed against the bank or the financial institutions. The reliability of the personal loan is very easy, which can be availed from anywhere in which there is less requirement of collateral security them this kind of loan is just a boon.

While availing for a personal loan, few factors need to be focused upon before availing of the loan. These factors will help the loan borrower move through the loan procedure efficiently and smoothly without any hindrance. Going through these kinds of elements and their information beforehand will make it much easier as they will be prepared for those kinds of things. There are different types of loan providers in the market which offer different eligibility criteria for the income with high Personal Loan Interest Rates. This loan requires a monthly salary or income source criteria, which needs to be produced through the documents showing the income. The documents need to be in the form of a salary slip, bank statement for the business's income tax return. The essential requirement of the income source to know by the loan providers is due to the risk of the non-repayment of the loan as there is no security like that of the other types of loans.

The next thing I have come into the picture is the credit score which states the financial repayment pattern and the style of the person who already availed loans in the past. A credit score explains the financial performance of the credit facilities in the past. It is preferable that if a person is having a credit score of above 700, then quickly the low personal loan will be provided from any financial institution. Still, if the thread is below 650, then it is considered that the person should improve the credit score or average short types of loans to make the kids more attractive and then apply for the personal loan.

If we talk about the age limits, there are different age criteria according to the other loan providers in the market. Foreign banks have other age limits, but in most cases, it is saying that the age limit has been kept within the range of 23 to 68 years of age for the salaried people. The Personal Loan EMI Calculator in the official websites will give a better estimation. The age limit is because, in most cases, if the person is below 20 years of age, then either he will be unemployed or be in education. Another means we can say that the person is not financially independent. The upper limit of the ages is that a person does not remain economically independent after that age.

Conclusion -

To conclude, you can say that different types of factors depend on loan availability, which varies from person to person. If a person is well experienced for an extended period, then the job is considered a stable one for which the bank or the NBFC find it confident for providing such types of loans compared to those who are very new to the job. It is also checked that there is no existing loan or the other kinds of liabilities are there or not according to the present situation can continue the loan with the other loans.

Read More:- Personal Loan VS Gold Loan