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Banks and Non-Banking Financial Companies are present to provide many financial services, and the most reputed loan is gold loan because of its many advantages.

Features of a gold loan

Loan amount: The bank or NBFC depending on the value of the gold sanctions loan amount. The lender checks for the purity and the weight of the gold article. The purity should be in the range of 18k-24k. The higher the purity and weight, the more the loan amount. Most banks and financial companies accept any type of gold article as collateral. But few financers don’t take gold coins or bars. So 80%of the gold’s value is granted as a loan amount, and the minimum loan amount is Rs 1500 in a few financial institutes. The gold loan per gram is the standard term financiers use to calculate the loan amount based on your gold article.

 Tenure: The loan term of the gold loan is known as tenure. It ranges from 3 months to 24 months in most banks and NBFCs.Some banks even offer up to 4 years as loan terms.

Interest rate: The rate of interest is a percentage of the loan amount availed and has to be paid each month as Equated Monthly Installment(EMI) without default. The interest varies from 7.5%-20%, and it depends on the loan amount and tenure acquired. The interest rate for the ICICI gold loan starts from 9%.

 The processing fee is incurred for the processing and approval of the application for a gold loan. The charge is usually 1% of the loan amount.

Prepayment charges are procured if the applicant closes the loan account before the end of tenure. The cost is NIL in many banks and NBFCs but few charge up to 1% of the loan amount with other tax rates.

Overdraft facility

Another added advantage of availing this loan is the overdraft facility. Using this facility, the loan amount borrowed can be used lie a credit card anywhere, and you can pay the interest amount whenever you wish. But if the lender asks for the interest, immediate payment is required. This facility is used by millions of gold loan customers and has excellent reviews.

 Various purpose of gold loan

Higher education: The amount availed using gold articles can be used to make yourself more knowledgeable and earn a degree from anywhere in the loan. Unlike study loans that can be used only for the tuition fee of the education, the gold loan can be used for other purposes like accommodation, purchase of books, laptop and other necessary equipment.

 Medical emergencies: Gold loan can be used for urgent medical needs. A gold loan is the best financial solution anyone can get during a pandemic or other health issues. Medical loans need documents and hospital bills to grant the loan, but a gold loan only requires essential id proof like a PAN card, Aadhar card, voter ID, and gold article to sanction money.

 Weddings: For marriage celebration and reception parties, this loan can be availed within hours and minimal documents. So even if it is a last-minute requirement gold loan is present to save you. The big day needs all the attention with complete glamorous. You can even use the official website of the bank or NBFC to take out the loan.

Vacations: A time away from reality is a pre-requisite. The money availed using the gold articles is best used by refreshing yourself and treating your family to Goa or Thailand. The loan amount can cover all your expenses, including flight charges and hotel bills. They are highly convenient with incredible offers.

Conclusion

A gold loan is an advantageous loan with flexible repayment options. After availing of the loan as a borrower, you should pay your monthly instalments on time. As the loan is secured, if the lender fails to see timely payments, they have the right o auction your gold.

Must Read:- Gold Loan Secured Loan 

They have a lot of misconceptions about gold loans and how they function. If you're in the dilemma of taking out a gold loan, read on to clarify some common misconceptions about gold loans. Individuals or applicants can use the Gold Loan Calculator to figure out how much interest they would pay on a gold loan they wish to take out against their gold or gold jewellery. Their gold or gold ornaments will be held as collateral or security by the lender, bank or NBFC until the loan is fully repaid.

1. Obtaining A Gold loan Is A Lengthy Process:- When it comes to gold loan myths, this is the largest one of them all. The only loan that you can receive on the spot is a gold loan. Banks and non-bank financial institutions (NBFCs) authorise gold loans and disburse loan funds within a day, if not an hour. So, if you're in desperate need of cash, a gold loan is the way to go.
   
   
2.  You Won't Be Able To Receive A Gold Loan If You Have Ancient Traditional Jewellery:- Many people believe that banks and non-bank financial institutions (NBFCs) exclusively lend money for new and recent gold jewellery. As a result, despite having many old gold ornaments, they would not ask for a gold loan. However, let us clarify this myth for you: banks do lend money on older gold jewellery. To qualify for a loan, the gold must be pure and at least 18 karat.
   
   
3. Only And Only Jewellers Can Offer The Gold Loan:- Many big banks and NBFCs now provide simple gold loans with attractive interest rates. As more people began to invest in gold, numerous banks and non-bank financial institutions (NBFCs) began to offer gold loans. Few non-bank financial institution (NBFIs) specialise in gold loans. Taking out a gold loan from a reputable bank or non-bank financial institution is always safe and secure. Those who believe that only jewellers can offer gold loans and are concerned about their authenticity might apply for a gold loan from a bank or non-bank financial institution ( NBFC). The Bank of Baroda Gold Loan offers secure on-the-spot processing, flexible repayment options, and more.
   
   
4. Your Gold May Be Discreetly Switched:- To secure a loan against your gold, you must keep it with a bank or NBFC. The bank or NBFC will return your gold jewellery if you repay your loan within a specified time frame. Many people believe that your ornaments are replaced with fake decorations by money lenders. As a result, many choose not to take out a gold loan because they are concerned about the protection of their precious jewellery. However, this is not the case. Banks and non-bank financial institutions (NBFCs) have particular security and locker systems in place to secure your gold loan held as collateral. It will only be deleted once you have completely paid off your loan. So you may confidently hand over your gold to a bank or NBFC for a loan.
   
   
5. The Interest Rates On Gold Loans are Incredibly High:- Depending on the type of loan, banks and NBFCs offer different interest rates. If the loan is unsecured, the interest rate is high, but the interest loan is pretty small if the loan is secured. A gold loan is a sort of secured loan. As a result, banks and non-bank financial institutions (NBFCs) do not charge exceptionally high interest rates. The interest rate on gold loans may vary between 10.26% and 26%. The interest rate varies depending on the loan borrower's characteristics. A gold loan calculator can assist an applicant in calculating the approximate EMI that must be paid to repay the borrowed amount. Applicants can try out the different interest rate and repayment terms offered by top financial institutions using the Gold Loan EMI calculator.

Read More:- GOLD LOAN FOR PURCHASE SOMETHING 

Availing of a car loan is the easiest the bank or NBFC provides anyone who meets the eligibility criteria. But the real action comes after availing of a loan. The bank or NBFC expects the customer to have a healthy relationship with the bank or financial institute by paying off the debt properly. The monthly instalment shouldn’t be missed any month without difficulties.
Tips to handling the car loan.

Budget planning :-
The first and foremost thing a borrower should do after availing of the loan is making budgets. Plan your spending's according to your income. A loan helps you by not denting your account primarily at once. If the borrower is careless about his/her spending and fails to pay the interest amount each month, the denting is sure to come. Cut all your unnecessary expenses and condense your unwanted spending like excessive dress shopping, outing too often, high restaurant usage are all bound to make your debt repayment highly challenging.

Down payment :-
The bank or Non-Banking Financial Institution(NBFC) grants up to 90% of the car’s ex-showroom value for new car loans and 80% of the car’s on-road price for used car loans and loans against the vehicle. Some banks and NBFCs even offer 100% of the loan amount. But that doesn’t mean you should avail the entire price of the car on loan. It is most definitely better if the loan is only at the maximum of 80% of the car’s value. Financial advisors and economists highly pressure the borrowers to make a minimum of 20% of the value as a down payment. That way, the interest amount and the principal amount are less.

Tenure or Term of the car loan :-
The period you avail of the loan for is widely referred to as the tenure of the loan. Banks and NBFCs offer up to 7 years as the maximum limit to help the loan and one year as the minimum period for the loan. Tenure of the loan affects your ability to spend largely. A longer-term gives you a low-interest rate, and a shorter tenure gives you a high interest rate. But on the whole, at the end of tenure, people who choose long loan terms pay more interest amounts than people who prefer short assignments. If the period is short, you pay the debt off soon, and the sooner you can have the interest amount for other things. So shorter tenure is better to handle the loan slickly.

Loan resurrection :-
If you are unable to pay the monthly instalment on time, banks and NBFCs offer a loan resurrection where you can change the Car Loan interest rate and tenure according to your capability. There are even options to transfer your loan to another bank or NBFC. A loan moratorium is another offer where you don’t have to pay the interest amount for about three months. This is offered when you are facing terrible financial troubles like unemployment or losing business, but you should have paid the past interest amounts on time.

Debt consolidation :-
Debt consolidation, both literally and figuratively, means combine and conquer. If you have n-number of loan and it is highly challenging to pay the interest amount each month. Then debt consolidation is your best choice. Here you can combine all the debts to a single loan or credit with only one principal amount and one interest rate to pay every month. This way, you don’t need to remember all your payments and have a more than necessary headache.

Conclusion :-
PNB car loan offers the best deals in the nation, with billion account holders and countless others availing car loans day-after-day without complications. The bank’s online website can be used to know more about its interest rates and loan offers without having to move a step. As mentioned before, availing of the loan is easy, but paying off the debt is simulating, so you should always maintain the credit score and have a healthy banking relationship with your lender.

Also Read:- Car Advance For An Independently Employed Individual 

A gold loan is a type of loan in which the gold is provided to the bank under whose custody it is kept safe. In return, a determined and calculated amount of loan is being sanctioned and approved in the customer’s name and is credited to his bank account. The purity of the gold in the form of the ornaments of the coin must be between 18 to 24 carats which are applicable all over the banks and the different kinds of  NBFCs.

There are different types of financial services available in the market, but if the gold is in the stock of any person, gold can also be used to get financial help. The form of the ornaments and the form of the coin can be used to avail financial help from the financial institutions on certain terms and conditions in which the person is entitled to repay in the form of EMIs.

Fast loan disbursal :

In the case of a personal loan, there is a maximum requirement of 48 hours i.e. 2 to 3 days time. In the case of your car loan, it takes about a week. In the case of a gold loan, it is very much easy. It might happen that if you have an Aadhar Card and gold with you, then there is a possibility that you will get a return with the amount of loan, and that is also within the period of 4 to 5 hours. 

One of the biggest advantages of a gold loan is that the disbursal is much faster than any other type of loan. The applications made are available in the form of the online web, which is much faster, and the documents are not mandatory to be attached or shared by post. Still, they can also be uploaded to the official website by scanning in JPG or PDF format.

No requirement of credit score :

A credit score is that type of score with a three-digit number issued by credit rating agencies. Based on this, the loan providers examine the customer’s profile to judge properly that the person is quite sound or not for providing any kind of loan. The availability of gold loan calculators on official websites can give a better estimation. 

It is generally counted when no collateral security or asset has been made as a backup if there is any kind of default or surrendering of the loan. These are generally used for unsecured loans. Still, in the case of a gold loan, there are no such kinds of risks because if any such things happen, then the banks of the nbfcs have full freedom to resell this particular gold auction is to recollect the amount are the leftover amount which is there.

There is no necessity for income proof :

There is always a requirement of income proof in case of unsecured loans like a personal loan, home loan and other types of loans. Which day becomes really difficult for a person who is not having any source of income or any kind of job. Many people want to have a new start in their life by availing of financial help and applying for a new start-up business, but due to these kinds of financial help options, they are unable to do so, and in those cases, the gold loan comes into the picture. 

Bank Of India gold loan also offers such facilities for the customers. The requirement of the salary slip, form 16, bank account statement etc. and all these kinds of things are not required, but only the proof of address, identity proof and the gold ownership documents is necessary for getting a gold loan.

No involvement of prepayment charges :

In most of the loans and the financial assistance from the Financial institutions, it has been seen that if any loan amount due if has been paid altogether before the expiry of the term, then a charge is being lifted by the bank, and that is called a prepayment or foreclosure charges. 

In the case of a gold loan in most of the bank, it is not followed, which makes it much more flexible, and the customers will also so we saved from the future following monthly interest payments which can be about as sometimes as they are also a bit high. To conclude, we can say that people mostly prefer gold loans due to these reasons.

Must Read:- Important points to know about Gold Loans  

Personal loans are unsecured loans which mean that the borrower does not have to enlist any collateral or security with the bank or the financial institution. Several factors such as the stability of income, employment history, past debts, repayment capabilities decide the borrowers’ eligibility for a personal loan. The amount loaned can be used for any purpose, there is no restriction on its disposition, it can be used to fund medical bills, wedding expenses, funeral costs, education purposes, moving or home renovation costs, etc. Personal loans are an instalment debt that allows borrowers to procure a huge amount at once. The borrower, in return, has to repay the principal amount with an interest rate charged on it by the loan issuing bank or financial institution. Banks and financial institutions allow the borrowers to repay the loan amount through fixed monthly instalments, commonly known as equated monthly instalments (EMIs). EMI means a fixed payment that is made by the borrower to the bank or the financial institution on a monthly basis till the end of the loan tenure. The interest on the loan amount can be charged by one of two methods - the flat rate method or the floating rate method.

A borrower can make use of the personal loan calculator which allows the borrowers to calculate their EMI in advance. This facility is available on the bank or financial institutions website or mobile app. The borrower can figure their monthly instalment before obtaining a loan by using this facility. The EMI of a loan is computed on the basis of the loan amount, loan tenure, and interest rate. The interest rate is decided by the bank or the financial institution and it differs from lender to lender. The borrower can use several combinations of the loan amount and loan tenure according to their financial requirements and repayment capacity to figure a loan that fits their needs. The EMI calculator feature allows the borrowers to try different combinations and plan their budget based on the monthly instalments before obtaining a loan from the bank or the financial institution.

An Alternative Option To Repay The Personal Loan To The Bank Of The Financial Institution:-

Prepayment and foreclosure - A prepayment option is an option that allows the borrower to settle their debt in advance i.e before the end of the loan tenure. This option allows the borrower to gain the advantage of the lower interest rates. However, banks and financial institutions charge a fee on prepayment and foreclosure known as the “prepayment penalty”. This fee is charged by the banks and financial institutions to recover a part of the amount lost on the interest that the borrower saves. The banks and financial institutions also impose a lock-in period on prepayment which means that borrower cannot make a prepayment until after the lock-in period is over. The prepayment fee and lock-in period differ in every bank and financial institution based on their policies on a personal loan. Making prepayments help the borrower to go debt-free faster. Paying the prepayment penalty would be considered a bargain against having to pay large amounts of interest on the loan amount. If the prepayment is made in full, the borrower goes debt free completely, if it is made in part, it reduces the EMI amount and interest rate, which saves the borrower a significant amount of money. Making a prepayment also improves the credit score of the borrower as it indicates a positive repayment capacity. The borrower must remember that they would be paying a prepayment fee and a lump sum amount to settle the loan. They should assess their financial situation and calculate the difference between the interest payments and prepayment penalty, only if they make a saving, they should make the prepayment. Indiabulls personal loan is one of the financial institutions that provide the facility of an online personal loan calculator.

Also Read:- Which is Better Gold Loan or a Personal Loan 

There are various loans in the markets nowadays which can be seen to be similar but are different. One such loan is a land loan and home loan. Many people might think of these loans to be one and the same but they are different and are available for different purposes. So let us discuss the meaning of these loans. First, let us understand home loans. Home loans are available for properties that are yet to be constructed in future or under construction or for ready properties whereas land loans are taken for buying a landholding or a plot of land for building a house or for mere investment purposes. Now, as there is a lot of advancement in the market. It is implied that people are bound to get caught in the wrong steps during taking these loans as many people don’t know all the details regarding these loans. Different loans involve different requirements and many people get confused in minute details involved in them.

The differences between the two are discussed on the various basis as below:

• Location of property and purpose: Home loans are available for ready properties or property under construction or yet to be constructed whereas land loans are available for the purpose of purchase of a plot of land, investment purposes or the land will be used solely for residential purposes.
  
  
• Tenure of the loan: There is a major difference in the tenure of both types of loans. Home loans are available for a period of a maximum of 30 years whereas land loans are available for a maximum period of 15 years. So, this is a major difference between both these types of loans. And this can be easier with the Home Loan EMI calculator which is provided by most of the banks to calculate their monthly installments so that they can accordingly check their monthly limit to pay.
  
  
• Tax benefits: If you avail of a home loan you can benefit from the tax deductions on both, the principal repayment as well as payment of interest. On the other hand, land loans are not eligible for any form of tax benefits or any kind of deductions but if you construct a plot on that land then surely there are tax deductions but that is only for the loan amount taken against construction. In addition, one should also know that these loans are only availed after the construction process is complete.

These are some of the differences between home loans and land loans along with their meanings. Now, it must be clear to you that even if they seem to be similar they are totally different and are available for completely different purposes. And most people go for availing of home loans.

Now, if we talk about home loans, there are various banks and lenders that offer a variety of schemes when it concerns taking home loans. But one should be sure of the fact that they take it from the bank that offers that home loan on correct terms and conditions and are trustworthy, that they don’t look for only their monetary benefits. One of the banks that is known for its years of service in this line and is quite trusted with is Allahabad Bank home loan. They offer home loans with easy terms and a rate of interest as low as 8.25% and onwards. You can also calculate your monthly installments through the EMI calculator. They keep their processing fees quite transparent. They require basic documents for the verification of the loan such as identity proof, income status, residency proof, passport size photographs etc. One should make sure that they carry the original as well as well photocopied documents so that the document verification process goes smoothly. And if all the processes go fine, you can easily get your loan approved within a short period of time without much hassle and stress.

Read More:- Types Of Home Loan And Its Uses 

When a person hits bottom on the financial position and has emergency needs that have to be fulfilled, they can take loans for these people in such a situation. A loan is a type of credit that is given to the individual in the form of money. They are obliged to pay them at the end of their tenure, and this payment is made every month called the EMI.A gold loan is a kind of loan that is usually a guaranteed loan when it comes to making a guaranteed loan with gold. It should be 18-24 carats for collateral or gold; the amount given from the gold loan depends on the gold weight. In general, the current market receives money 80 per cent of gold's cost.

Who can apply for a gold loan?

If you have gold, you may obtain a gold loan. Gold loans can be used by any indigenous resident, including salaried professionals, business people, homemakers, and even farmers, instead of personal loans that include stringent eligibility criteria. To qualify for a gold loan, you don't even need a good credit value. So when you have low credit, you still have a chance to get money if you've got enough gold to Pledge. The different kinds of an emergency can be educational, family-related, personal-related, and social-related as well.

We have a different type of emergency many times when we cannot meet any sudden expenses. For example- During the rainy season, one may experience electrical problems. The cables can get wet, or a short circuit can happen. The house’s cable circulation may have been damaged as a result of a shock near the kitchen. Any kind of fire accident can occur if not treated properly. The best option in this particular situation is to finance this and fulfil specific small requirements. For such a purpose, if one doesn’t have money to pay the bills, they can take gold loans. When you take a Bank of India Gold Loan Per Gram, it is the same throughout India.

Why people use the gold loan?

1) Faster handling- Because gold lending is backed by physical gold; bankers are happier to lend in general. The banks can sell the gold if they do not accept gold lending, so banks usually pay out the loan after few hours because the time for treatment is lower.

2) Option for payment of interest only– Gold loans have a unique feature in which the borrower can only pay the interest and principal amount at the time of loan closure.

3) Lower interest rate– Because these loans are secured, banks charge a lower interest rate than unsecured loans like personal loans. Typically, interest rates range from 13 to 14%, while personal loans usually start at a 15% interest rate. Furthermore, the gold loan interest rate can be reduced further if another security is attached as collateral.

4) No fees for treatment– Many NBFCs and banks do not charge the treatment fees because these loans are instantly given instead of gold held to the creditor as Collateral. Gold Rate In Bangalore is R.s 4225.

5) Low charge or no charge for foreclosure- Some lenders charge no prepaid fees, while some banks charge a 1 per cent advance payment penalty.

6) Required no income evidence– Lenders generally do not request proof of income, as the loan is guaranteed against the bank's gold.

7) Bad credit history, not an issue– Unlike other loans where the loan amount is given depending on the repayment capability and credit history, the case is different in a gold loan. Because gold is used as collateral, the lenders are not concerned about the main component and thus do not monitor the borrower’s credit history.

8) Safety of gold– The lender is responsible for the safety of the gold. It will remain safe in its vault, and you don’t have to worry about that. After paying the amount back, you will receive the gold back.

Must Read:- Increasing demand for Gold Loan 

One can get a loan from the nearest branch of any bank. For more bank branch details one can visit the online website of the bank. Getting a loan is a big deal. One should be well researched before applying for a loan. Banks and non- banking financing companies have their own different eligibility process. Getting a loan from a bank can be very time consuming sometimes. It requires a proper documentation process. 

One can calculate the loan availed from the bank through a Loan Calculator. Banks and non-banking financing companies have helped thousands of people in financial difficult times by providing them loans. Various sectors have been benefited during financial difficult times by availing loans such as primary sector, secondary sector and  tertiary sector. It has also helped in the growth of Indian nation. People all over India trust and believe in its banking sector. It is one of the most trusted sectors of our country.

Many times people might face difficulties in availing loans. There can be various reasons why one’s loan is being rejected. 

Some of the most common reason due to which loans get rejected are:- 

1) Bad credit history:- One of the main reasons for rejection of loan can be borrowers' bad credit history. For availing loans one must have a good credit score and history. Many banks and non-banking financing companies(NBFCs) do not approve loans of the borrower with bad credit history and score. One must look after the credit score and history before applying for a loan. As there is a probability of rejection of the loan application when a borrower has bad credit history and score. 

2) Insufficient Income:- This is another major reason for rejection of the loan application. Many lenders at banks and financing companies look at the work, investment, and other income before they approve your loan. Lender needs to ensure that you can repay the loan back. One with insufficient income might face difficulties in availing loan. One should check the income before applying for the loan. 

3) Lack of collateral:- When applying for loans such as gold loan, business loan the lender looks at the collateral. Without collateral, lenders may find it difficult to approve your loan. One can provide personal assets as collateral. Collateral by the lender is taken for the security purposes and is returned after the successful payment of the loan. One must provide collateral for fast approval of the loan.

4) Over-borrowing:- If the borrower has taken too many loans together then financing companies and banks may not give you fast approval of the loan. As they may consider you a risky candidate. One must not take too many loans all together. While applying for the loan one must have a clean history. 

People might find difficulties in approval of the loan many times. One must keep a clean record with a good credit score and history for fast approval of the loan. One needs to be aware of the bank branch details required. Many financial companies and banks do a research analysis of the profile of the borrower before lending them the money. One with a good history of repayment of the loan can be provided fast approval of the loan. There are various private and public banks which provide loans to the people all over the country living in rural as well as urban areas. One can use the loan amount for several purposes during difficult times. Many people make several mistakes while applying for a loan one should avoid those mistakes for the fast approval of the loan. One can consider this article before applying for a loan as the common mistakes which people make while applying for a loan are mentioned above.

Also Read:- Why Are Banks More Trusted Than NBFCs 

The RBI and other government organizations regulate private financial institutions or NBFCs. They each have their unique specialty and deal very effectively with their areas. The precise field in which they work, therefore, is important to know. In specific instances to understand which financial assistance or deposits should be addressed. In the interests of depositors and investors, it is crucial to differentiate NBFC vs Bank.

Let us thus investigate the distinction between the bank and the NBFC. From 1997 forward, NBFCs must be governed under the RBI Law of 1935. They must: register at RBI, maintain minimum capital, some of which must maintain SLR, some must maintain the CRAR ratio, etc. The RBI also lists other stringent standards. The RBI identifies key NBFCs, by classifying them as systemically significant NBFCs, NBFC deposits, NBFC- MFIs, etc.
There is a strong distinction between the business banks and the NBFIs. However, they concern the degree rather than the type.

What an NBFC is:

The registration of an NBFC is carried out following the Act of the Companies, 1956 or 2013, of an entity engaged in loan and advancing activities, of the purchase by public authorities, or of other marketed securities, such as leasing and hire, chit funds, insurance business, not included by any institution whose principal is a non-resident entity.

Non-Banking Financial Companies offer outstanding economic services through many sorts of financial operations. NBFCs are a large population of microfinance and insurance varied services. They offer loans to MFIs, infrastructure or financial assets, and much more.

Bank against NBFC Bank:

Not just in the workings of a bank and NBFC. The distinctions are. The most important are the regulatory authorities' perspective and the scope of RBI financial regulation.

Regulation:

Under the Banking Regulation Act of 1949, a bank is registered. Whereas NBFC is either incorporated or recorded with RBI under the Indian Companies Act of 1956 and 2013.

The banks deal with public deposits under tight RBI rules. NBFCs must also meet the rigorous requirements of RBI, although they have less control than the bank. The loan EMI calculator facility can be used by bank existing customers to estimate payment amounts. Although regulatory standards have recently converged, this disparity is reduced. Now, because of the consequences of big NBFCs, the restrictions converge.

Acceptance and Interest Deposit:

Only IFSC codes some financial tasks can be performed by the NBFCs. Some NBFCs (other kinds of deposits) are authorized to receive deposits, although they are monitored quite rigorously by the RBI. For a minimum term of 12 months and a maximum of 60 months, NBFCs are permitted to receive/renew public deposits. Out of 12,000 registered NBFCs in India, there are less than 300 deposit-taking NBFCs. As to the interest rate, NBFC can provide a maximum interest of 12.5%. At least at monthly intervals, the interest may be paid or compounded. It is not permitted to last shorter than a month.

RBI is not guaranteed to refund deposits in NBFCs whereas deposits are guaranteed in banks.

The interest rate for home loans:

Banks operate under the supervision of RBI directly and NBFC registration under the Companies Act is finished. This fundamental distinction is directly related to the loans levied by banks and NBFCs. Banks may generally employ variable interest rates to their home loans which are tied directly to the MCLR (Marginal Cost of Funds based Lending Rate). In this scenario, with changes in RBI policy, the rates are increased or decreased. Economic considerations impact policy and vice versa.

NBFCs, by contrast, define home loan interest rates at prime lending rates. This rate is not associated with the RBI. The borrower can negotiate this to obtain a larger charge, at a lower rate as the borrower will be able to make far more flexible decisions on the interest rate.

 
NBFC vs Bank Conclusion:

The NBFC license is granted primarily for the financing and economic development of the disadvantaged sector of society. At the same time, the government creates banks to collect deposits and give credit to the people.

Also Read:- I Need To Move My Vehicle In Advance 

SITUATIONS IN WHICH A PERSONAL LOAN CAN BE YOUR SAVIOUR - A personal loan is an unsecured loan, which can be issued by a money lender or a bank or any other financing company. It is unsecured because you do not have to pledge any of your assets as security to the bank. HDFC personal loan is also an unsecured loan. The fact that there is no collateral required makes a personal loan suitable to avail in case of an emergency.

Following are some of the situations in which a personal loan can be your life savior-

Medical emergency- There are the emergencies that are the most serious ones and that can take a really serious toll on your finances. Sometimes, a medical insurance may not cover all the expenses and at that time, you can apply for a personal loan. When you will apply for a personal loan, the amount of money will be disbursed in your account in such a short period of time after the successful verification of your details and documents. Also, a personal loan is hassle free and can help you save up money too.

Wedding- Wedding is the one of the main life events of a person and everyone wants their wedding to be grand. A Wedding comes with a lot of financial stresses and not everyone can easily cope up with them. Here, a personal loan can help you as you just need to provide your details and no security and after the verification of the documents, the money will be transferred in no time in your bank account.

Relocation- If you are moving to a new house, you know that it can be stressful physically, mentally and financially too. Personal loan stands there for you in a situation like this. By availing for a personal loan, you can fill up all your expenses easily.

Unplanned vacation- Everyone loves to travel but due to the financial limitations and restrictions, not everyone can for a vacation every year. You can even enjoy unplanned vacations with the help of a personal loan. The money will be disbursed in your bank account in no time and the documentation is minimal and easy. The whole personal loan eligibility is really simple.

Home renovation- Most of the times, the expenses in renovating a home exceeds the original budget and we have no option left but that does not imply that you do not renovate your house or stop it because of the insufficiency of the funds. You can take some financial help by availing a personal loan and you are good to go.

Education of kids- As we all know that the education is getting more and more expensive with the passage of time. However, education loans are also available but some people may not be eligible to avail an education loan. Here, you can apply for a personal loan and provide the support and education to your children that they require. You do not have to see the financial instability as a burden rather you can take help by applying for a personal loan. A personal loan will also make it easier for your child as he/she can take up more courses and continue further education.

Buying gadgets- Today is the age of technology and it is really not easy to match up the pace with the rate at which the technology is progressing. New smartphones are getting launched everyday. From home appliances to the entertainment units, electronics and the technology have become an integrated part of our everyday routine. It has made our work easier. You can avail a personal loan to purchase the new things and keep yourself updated with the system without spending all your savings at once.

CONCLUSION - A personal loan can help you in a lot of ways and especially during the emergencies. It is an unsecured loan and it means that you do not have to provide any security to the bank at the time of applying for that loan.

Also Read:- Home Loan vs Personal Loan 

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 offers personal loan 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.    

Must Read:- How is Credit Outflow boosted from a Personal Loan? 

A personal loan is an unsecured loan that can be used for various purposes like weddings, higher education, vacation, funerals, parties, birthdays, business, renovation, designing, medical emergencies, asset buying.construction, furnishing, electronic gadgets, and/or any other specific or general purpose. This loan can be legally availed using a bank or Non-Banking Financial Companies(NBFC). Both online and offline services are available and instant disbursal of the loan is a gigantic advantage.

Factors To Be Considered Before Going For A Personal Loan:-

• Eligibility Criteria: A loan albeit easy to avail still requires certain criteria that an applicant needs to meet before he/she becomes a borrower. The applicant must be at least 18 years and at most 65 years to avail this loan in most banks and NBFCs. The applicant must either be a salaried individual or a self-employed individual(business professional). Joint applications are acceptable. The applicant must have been working for a minimum of 2years and at least one year with the current employer. If it is a business, the business should be running successfully for a minimum of 2 years. The bank or NBFC needs certain documents like ID proof, income proof, address proof, employment proof, bank statement to validate the eligibility.

• CIBIL Score: Credit Information Bureau (India) Limited (CIBIL) is a credit company that maintains the personal information, banking, and employment information in addition to the past credits(loans or debts) of individuals, companies, corporations, societies, and every other banking professionals. The report is summarized by a three-digit number known as credit or CIBIL score that plays a vital role in determining one’s eligibility to avail a loan. And for unsecured loans like personal loans, the score is a tad bit more essential. The number if above 700 is a good one and below 600 is a bad one. So check your CIBIL score and know if you can apply for personal loan and if so how much money can you apply for the loan.

• Principal Amount: The amount a bank or NBFC grants you a loan is the loan amount or principal amount. For a personal loan, the amount goes to a maximum of Rs 50 lakh in most banks and financial institutes. The loan amount depends greatly on the CIBIL score and your monthly income. A high income grants you more loan amount and vice-versa.

• Tenor: The tenor of the loan is the period you can avail the loan for. The tenor for a personal loan varies from 1 year to 5 years in most banks and NBFCs but some financiers offer more tenor than that. The repayment term should be carefully chosen. A long tenor usually means a low-interest amount each month till the end of a tenor but the total interest amount is more than a short tenor with high monthly instalments every month.

• Interest Amount: Equated Monthly Instalment(EMI) is the interest amount as a borrower you will be paying for the loan amount you availed till the end of the tenor. The personal loan interest rate varies from 7.5%-20% per annum depending on the loan amount, eligibility, CIBIL, tenor among others. Before availing the loan you should compare the interest rates from one financier to another carefully. And after availing the monthly instalments should be paid on time.

• Additional Charges: Banks and NBFCs charge additionally for the taxes, processing fee of the application among others. The processing fee is incurred for the approval and the processing of the application. It usually goes up to 2.50% of the loan amount. Therefore make sure that the lender you take the loan out on doesn’t bill you immensely. ICICI personal loan is an illustrious loan with the most reputed offers and high-end customers availing loan without hesitation proving their trustworthiness day by day.

Read More:- Can a salaried person obtain a Personal Loan?