Blog #Personal Loan Interest Rate

Personal loans are an unsecured type of credit that are often used to meet short-term financial needs. Its multi-purpose design allows it to be used for a variety of occasions, including weddings, home renovations, travel, and more. Furthermore, there are no limits on the amount lent, and it can be used for any reason.

1) There is no requirement for a security deposit:

One of the advantages of taking out an online personal loan is that it is unsecured. This means you won't have to put up any assets as security for your loan. While this could be the cause of your high-interest rate, if you meet the eligibility requirements, you can easily obtain a low-interest personal loan.

2) Only the most basic documentation is needed:

The verification and documentation process has become really quick in this digital era. This is true for an instant personal loan because they are quick to disburse and only need a few documents to be approved.

3) Quick approval:

A personal loan is easy to get approved. You just need to fill their eligibility, after this, the cash is quick to receive. Because of this, we say this is fast in terms of Emergencies. Personal loans are available that are fast and simple to obtain. This is why, in a financial emergency, it is the safest option. The process has gone digital now and because of that people are able to get the desired amount on a quicker basis.

4) Nature is multipurpose:

Except for investment and illicit activity, a personal loan may be used for something. Apart from that, it is multipurpose and can be used for a variety of purposes. Other types of credit are taken for a particular purpose and can only be used for that purpose. A home loan, for example, is used to purchase a house, while a car loan is used to buy a car. 

5) Tenure:

What factors do you consider when choosing a personal loan? The biggest role or aim of tenure is to give you enough comfort time frame and due to this many borrowers are able to EMIs on time and even before maturity. The longer the tenure means the lower the EMIs, but the interest will be high. Choosing a bank that has a good bank with flexible tenure is important. One can check these with the help of a personal loan interest rate.

6) Loan amount:

The best bank to choose for taking the loan is the one that offers the right amount. For example, you want Rs.20,00,000 but the bank has a limit of Rs.15,00,000, here this is not a perfect bank to choose the loan from. 

7) Processing fee:

Processing fee is like an entry fee or a green card as well that a borrower is willing to handle the loan amount . Before taking any decision you should always think about these types of fees as well. Low transaction fees at Bank of India personal loan will help you pay off your loan faster.

There are some key factors to determine before choosing a bank for taking a personal loan, some of these parameters are mentioned above along with a few examples.

Read More:- Six Things To Consider Before Opting For A Personal Loan 

Personal loan -

A personal due to its high reliability and minimal processing time makes acquaintance easy for the borrower. The one who borrows is in need which makes him/her prone to opt for a loan. At such times, Personal loans can come to aid.

The personal loans can be used in cases of -

• Medical emergencies due to health issues or accidents
• Home renovation or construction
• Higher education purpose
• Debt consolidation purpose 
• Travel purpose
• Wedding purpose

There is no restriction on the utilization of the Canara Bank Personal loan amount.

Eligibility for a personal loan -

1. The applicant must be between 21-75 years of age which differs as per the employability.
2. The salaried applicant age should be between 21-58 years of age, while for self-employed, it has to be 21-65 years. 
3. A CIBIL Score of above 700 is mandatory.
4. An income proof has to be submitted along with KYC Documents. 
5. A person with a low credit score has high chances of a loan getting rejected.

Documentation -

Documentation is done for a background check. KYC documents, along with two passport size photographs, have to be submitted for verification. An address proof, Identity proof and Income proof have to be submitted. 

The following are the enlisted documents among which you can submit one - 

1. Identity proof :
   Aadhar card, Driving license, Voter ID, PAN Card can be submitted.
   
   
2. Address proof :
   Aadhar card, Utility bills, ration card, Passport, Rent agreement of at least one year.
   
   
3. Income proof :
   ITR, Bank statements of 3 months, Salary slips of last 6 months.

Application in personal loans An application can be made through Offline or Online modes from the official website of Canara Bank. After application, the documentation process is done to submit the required KYC documents for verification and income proof. An Income is necessary for loan approval. A loan for Rs.10 lakhs or more can be granted. Loan tenure of up to 5 years is given to the borrower or applicant. The advantage of a personal loan is less paperwork and documentation involved in the application.

The approval rate is faster compared to other types of loans and pre-approval offers are also available. Several Prepayment options are also given by banks ranging from 13 to 36 months, and no fee is charged upon them. 4% of the Principal Amount is charged for the repayment period between 13-24months. 3% of the principal amount is charged on 25-26 months prepayment options. An exceeding 36 months for prepayment are charged with only 2% of the principal loan amount. A GST is applicable over the specific prepayment options you choose. 

It can take a time of almost 15 days to get this loan approved, but it can take less time for a loan to be approved for Canara Bank customers. An Approval letter is given to the borrower from the bank. The letter contains information about the lending bank, personal loan scheme, Personal Loan Interest Rate, Repayment options, processing fee, total loan amount, Tenure, repayment options etc. The borrower can check eligibility using an eligibility calculator. The Interest rates for personal loans are only 9.99%. A 1% of the loan amount is charged as a processing fee. However, Rs. 2135 is the lowest EMI per lakh to be repaid. 

Personal loan Repayment options -

There are several loan repayment options provided in personal loan by the bank, which are -

• Post Dated Cheques :
  A check of future date is deposited in the bank.
   
• Electronic Clearance System : 
  An amount transfer from digital platforms is done.
  
  
• National Automated Clearing House : 
  NACH offered by NPCI can be used as a model for real-time transactions in debt consolidation.
  
  
• Standing instruction : 
  An instruction given to the bank to make payments from a bank account of the borrower's indicated amount.

       Also Read:- Alternatives For Repaying Personal Loan For Defaulters 

Personal loans are very user-friendly. The tenure period of the personal loan can be extended up to 6 years. Certain prerequisites will help you to know the process of applying for personal loans better. 

Some of them are listed below -

1. A good credit history : 
   Maintaining a good credit history is significant. A lower credit score implies terrible debt management, and sometimes this may result in loan rejection and high-interest implications.
   
   
2. Comparing interest rates :
   Different lenders and banks provide different interest rates. There are many financial platforms like Paisabazaar, Bankbazaar, etc., which provide proper information and comparisons of different interests of different firms using which you can find the right personal loan for you.
   
   
3. Access all costs :
   while applying for personal loans, there are different fees such as processing fees, prepayment fees, late payment fees, penalties, etc., which will affect the total loan that you are taking. It's better to access all the fee payments to manage your finances better.
   
   
4. Consider all the needs required for the right loan amount :
   You need to analyze the things that you require and for what purpose you are applying for the loan. You need to calculate all the things that you need to do with the amount that you will borrow as a loan. This will help in financial management.
   
   
5. Evaluate your abilities to repay the loan :
   It is essential to assess how much monthly repayment you have to do and whether you are financially capable of that or not. Generally, the monthly repayment is according to the monthly income that you get.
   
   
6. Avoid falling for fraudulent offers and plans :
   Some private lenders or organizations try to attract you with very high offers at very low-interest rates to get you in a trap. Don't fall for those. You might end up losing a greater amount of money.

The important thing while taking a personal loan is the Personal Loan Interest Rate. The interest rate is the principal amount charged by the lender for the use of his money. It will give you information about how much you have to pay back to the lender monthly, and from this, you will also know the total amount you have to pay over the life of the loan. Different banks have different interest rates. A personal loan can also be borrowed from any certified online lender who will charge interest of his wish. The interest rates also depend upon the tenure period. If the tenure is long, then the EMI will be higher; if it is less, then the interest will be less.

You can get lower interest rates if you have a very high credit score. Compare the lenders in the market and analyze them to see which source is giving you the best interest rates. Many financial websites help you compare different lenders to give you the best suitable personal loan for you. Look for seasonal offers if it's not an emergency case. Banks provide several discounts on loans availing those can help you save some money.

One of the best personal loans is Syndicate Bank Personal Loan. It provides interest rates from 11.25% to 13.30% up to a loan amount of 20 lakhs. They do not ask for any processing fees. If they ask, it is about 0.50% of the loan amount, which is relatively less. The maximum tenure period is up to 6 years. Any person of a minimum age of 21 can apply for a personal loan. The other requirement is the person has to be self-employed, getting regular income. He or she should earn at least the minimum amount which is required to be paid.

Conclusion -

Many banks provide meager interest rates on certain occasions. You need to look out for those and grab them. With low-interest rates, you will be able to save money. Analyzing different sources before applying is a brilliant decision.

Also Read:- Personal loan vs two wheeler loan