Blog #HDFC Personal Loan

Loans like any other financial transaction require consideration to existing, i.e. there must be some benefit to both parties for participating in this transaction.Loans in the financial system also act as an instrument of debt and are utilized for creating immediate liquidity of cash or capital, or in any other form, and to spread out the burden of a heavy expenditure over a period of time. This helps the loan receiver to continue his work or to undertake the transactions he needs to make in order to fulfil his aims. 

The loan provider also benefits as firstly he has successfully moved the funds in the market instead of just saving them. This allows him to get good returns on his investment as at the end of the tenure period he receives the principal amount of debts and in addition to it, he receives the interest at which the loan was provided.

Loans are classified into two types on the basis of the provision of collateral for them.

• Secured loans: These loans are guarded with collateral of some value which assures the provider of the commitment of the loan taker and also saves him from absolute loss in the event the loan turns out to be a bad debt.
  
  
• Unsecured loans: These loans are not provided against collateral.  
  
  

One of the most distributed forms of unsecured loans are PERSONAL LOANS with that you will get use EMI calculator personal loan, these loans also possess some inherent limitations which can be summarised as follows :

1. Illegal Activities:

It ought to come back as no surprise that confiscating a private loan to fund nonlegal activities could be a common restriction among lenders. One distinguished on-line loaner states in its commonly asked queries sections, “Our loans can not be used for… gambling, adult businesses, or alternative legal activities.” whereas not all loan suppliers state this expressly within the loan agreement or terms, borrowers ought to bear in mind that obtaining caught exploitation funds for any price that falls into an area of lawfulness might cause a haul. The loan company has the correct to recall a loan if that takes place, which means the total balance becomes due instantly.

2. Education Expenses:

Nearly all lenders prohibit the employment of non-public loan greenbacks once it involves education, specifically paying for tuition or alternative prices directly tied to attending a university or university. which will embrace space and board, books, technology or alternative student fees that may usually be paid out of pocket or through a student loan. though some borrowers might not assume employing a loan for education expenses isn’t an enormous deal, doing this might break the law. below the reality and disposition Act, students have a special provision because it relates to personal education loans that state a student recipient has thirty days to simply accept the terms, also as 3 days when approval to cancel the loan fully. Most personal loans don't have identical express provisions for student borrowers, creating it nonlegal to use the funds for education.

3. Paying off a Loan Balance: 

Several loan suppliers conjointly impose a restriction on borrowers relating to paying off a loan balance with an identical loaner. Let’s say you've got a ₹1,200 balance on a private loan with a loaner, and you choose to require a brand new loan for ₹5,000 with an identical bank. among the loan agreement, there's possibly a stipulation that states the loan income can not be accustomed to finance or pay off a current loan balance, which means the recipient is cursed with 2 loans and 2 corresponding monthly payments.

4. High Fore-closure cost:

Personal loans are usually bound with high Foreclosure costs as early Payment might cause the loan provider to lose on his profits in the form of interest on the loan. 

The HDFC BANK is a public sector bank in India. HDFC personal loan status checking you will get from the website and HDFC Personal loan offering will be for  various special consumers like government employees, Defense personnel, pensioners, etc. 

Also Read:- What Is The Reason Behind The Non-involvement Of Collateral In A Personal Loan? 

With personal loans becoming popular, new lenders are coming out every day. This has uplifted the bar of competition for the lenders and they are coming up with unbelievable offers every day. This has made it very essential to know what you should look into a lender and their offer before availing a loan from them.

Following are the points to evaluate to know which lender is best for you :

1) Interest Rates: As discussed earlier, the increased competition has made lenders offer at competitive rates. A lot of lenders offer at low-interest rates to attract more customers. Therefore it's very important to compare different interest rates offered by banks and non-banking financial institutions. Comparing would allow you to get the most affordable deal for you. Use a personal loan interest calculator to do accurate and timely calculations.

2) Loan amount: Different lenders have different ceilings for loan amounts according to your income level. Whenever you find the perfect interest rate for you, check if that lender provides your required amount on your income level or not. Call on their helpline by going to their website and inquire about everything.

3) Income eligibility: The minimum income level required is different by different banks and NBFCs. Some have 15,000 as the minimum income requirement while others have Rs. 25,000 as the minimum requirement of Income. It varies greatly from one lender to another. Therefore before applying, check for this so you don't apply at a place where your application is ultimately going to be rejected due to a policy.

4) Read terms and conditions: This must be done even before applying, not after everything gets approved and you are about to sign. When you like a loan scheme, ask the representative to show you the terms and conditions and read them thoroughly. There might be some technical jargon / terms. If you don't understand them then ask for help from the representative who is assisting you or some professional. 

5) Look for processing charges: Many lenders charge processing fees and it could be as high as 5 percent or even more. Even though it is a one time charge but when you include it in the expenses you would be paying, it makes up a considerable amount. Hence, check your lenders terms related to processing charges.

6) Look for prepayment changes: Most of the lenders charge you for prepayment. If you don't know already what prepayment means, it means to pay a portion of your outstanding amount before the time to reduce principal, which then reduces the interest. Lenders can charge you anywhere between 2 - 6 per cent for prepayment. Look for the one that doesn't charge a very high prepayment fee so in case you want to prepay later, you don't have to pay heavy charges in it. This is also called partial prepayment.

7) Look for foreclosure charges: Foreclosure means closing beforehand, that is, paying back all the loan amount before the due date. This saves a lot of interest payments for the borrower and reduces lenders profit since the interest payments are reduced. Hence, it's important to see how much your lender charges on foreclosure. Foreclosure is also called full prepayment. This is why people mostly get confused between the two. It only makes sense to prepay or foreclose if you are doing it well in advance, that is, in the earlier stages of your loan.

The first year is usually the lock-in period therefore you won't usually be able to prepay in the first period. The first year usually takes away 60 % of your obligation therefore it's very important to prepay very early as soon as the lock-in period ends.

Check for different lender's interest rates, prepayment fees, processing fees etc. before you go for any loan. Check Hdfc personal loan interest here.

Try maintaining a good relationship with your lender. Timely pay back the loan if you have taken it earlier. Deposit cash from time to time in your bank. Don't enter into a tiff with any employee.

Read More:- Choosing The Right Lender In Personal Loan 

A personal loan that can be acquired at any bank or NBFCs is an unsecured loan. The entire loan process of a personal loan is very quick and easy. You can easily get funds through this loan option. However, a lot of individuals are confused and often ask if they can apply for two or more personal loan options at the same time. So to answer this question today we're going to state all the factors, possibilities and chances of getting multiple personal loans and have listed some of the common factors below:

1) The amount has to be repaid:- Customers have to repay the loan amount they've borrowed. Banks don't give customers loans for free. They have to repay the amount along with the interest rate. So you'll have to repay both personal loans along with their interest rate. 

2) Credit score will be impacted:- The credit bureaus keep complete track of every loan, debt and credit you take. So the fact that you've applied for a personal loan will be recorded along with its repayment. And taking another personal loan will impact your credit score by a few points. And if you miss even a single instalment of both loan options, then your credit score will be heavily affected.

3) You may be charged with a high-interest rate:- If your credit score is low, then banks will either reject your application or they will provide the facility of a personal loan at a high interest rate. 

4) Your net worth should be positive: Banks will only approve your application if you have a decent income to repay the loan amount you've borrowed. So if you're planning to apply for another personal loan then you should be prepared to repay both instalments on time. 

5) You can be stuck in a vicious debt cycle:- If you ever face a situation where you don't have funds. Then you'll be stuck in a debt cycle because you'll have to repay the loan amount of both personal loans. 

6) More documentation will be needed:- If you've decided to apply for more than one personal loan, then banks will demand more documentation. No one wants a risky customer, so to confirm things banks will ask for additional documents. So you should have a stable job with a constant source of income, banks will check whether or not you can repay the loan options according to your repayment capacity. 

7) You can't pay more than 50% of your income as EMI:- Before applying for a second personal loan, you can use some online tools like instant personal loan online to calculate your expenses. Because you can't choose 50% of income as EMI for one loan. As of now, you'll have to pay both loans. So you can't exhaust 50% of your monthly income for one loan option. 

Advantages of personal loan

Applying for a personal loan is the best option if you're looking to get funds for immediate purposes. There are a number of advantages, benefits and services that can be availed through applying for this loan option. 

We've mentioned some of the most common advantages of a personal loan below: 

1) Hassle-free processing:- The entire application process of a personal loan is very quick and easy. You can easily get your loan processed within a few days. The application is usually verified within 2 to 5 business days. However, a lot of banks will approve your application instantly if you have a high/decent credit score. 

2) Unsecured:-  HDFC Personal Loan is an unsecured loan, so you don't have to pledge any type of asset/gold/property to get funds from this loan. Banks will easily disburse funds even if you don't have any assets under your name. 

3) Flexibility:- Customers have the complete flexibility to use the funds given through personal loans freely. So they can use the funds for various purposes like weddings, family vacation, debt consolidation, child's education fee, medical bills, miscellaneous expenses, etc. 

4) Documentation:- The entire documentation process of a personal loan is very quick and easy. You just have to submit the application form and some basic KYC documents to get your application verified.

Must Read:- Personal Loan no-cost EMI option 

What is a Gold Loan?

A Gold Loan is a secured form of Loan which is secured by anything of value you possess, known as collateral. Your gold valuables or other expensive items, like jeweler, are common instances of collateral. A Gold Loan disbursal process is quite simple. Firstly, eligibility criteria have to be checked by the borrower before availing of a loan. An Application has to be submitted in the nearest branch of HDFC Bank or via the official website. The next step is Document verification and Purity Test of Gold, where one has to submit Identity Proof and Residence proof and the gold, which has to keep the mortgage. The Purity test of Gold is conducted inside bank premises at a scheduled time by Bank authorities. Once all these processes are complete, the loan gets approved in a short while. An Approval letter is given to the borrower containing the details of the lending bank, gold loan scheme, total loan amount approved, Interest rates, processing fee, prepayment charges, foreclosure charges, tenure period, repayment options, etc.

 Benefits of Gold Loan :

• A Gold Loan up to Rs1 Crore can be financed.
  
  
• A Gold loan can get disbursed within a few hours after applying.
  
  
• Loan tenure of up to 24 months can be given to the borrower.
  
  
• Less paperwork involved in Loan disbursal.
  
  
• Gold valuables have to be kept as collateral for availing this loan.
  
  
• No guarantor is required to avail of this loan as collateral is involved.
  
  
• Interest rates on Gold Loan are less as compared to other loans.
  
  

What is a Personal Loan?

Personal Loans are a form of unsecured loan which is obtained without the use of collateral. The lender risks a higher amount of risk because the loan is backed by nothing of value. An individual can avail of a Personal Loan for satisfying one needs which can be for a wedding, higher education, travel, medical emergencies, financial miseries. Personal loan interest rates are higher than other loans and can range from 16% to 24%. The Personal loan application can be submitted online through the bank’s website or offline by visiting the bank in person. Eligibility criteria are a set of rules decided by the lending bank which the borrower has to abide by. After fulfilling all the necessary eligibility criteria, an application for a loan has to be submitted. Document verification is an essential step in the Loan Approval Process. An identity proof, residence proof and valid Income proof have to be submitted by the borrower. The Bank representatives thoroughly examine these documents. Income proof is asked to prove one’s ability to repay the debt as no collateral is involved there. These loans come up with a more extended tenure period. A CIBIL Score of above 750 is requested, and a good credit score makes the loan disbursal process quicker. Self-employed individuals or salaried people can avail of this loan by showing proof of salary slips or business proof of previous years. A bank representative contacts you once the loan gets approved, and an approval letter is handed to the borrower, which contains all the required details of the lending bank and loan details.

Benefits of Personal Loan :

• A Personal loan of up to Rs75 lakh can be financed.
  
  
• Personal Loans can get disbursed within a day after applying.
  
  
• Loan tenure of up to 60 months can be given to the borrower.
  
  
• Less Paperwork involved in Loan disbursal.
  
  
• There is no need for collateral.
  
  
• A guarantor is required to avail of this loan.
  
  
• Attractive Interest rates starting from 9.90% can be availed depending on the loan scheme.
  
  

Therefore, HDFC personal loan and Gold Loan come up with their advantages and simple application process. Personal loans are the best-suited option in emergencies, whereas the higher loan amount with incurred interest rates should be considered. Gold Loans have low-interest rates, but the gold can get auctioned if you fail to repay.

Also Read:- How do your Aadhaar card and PAN card help you to get a Personal Loan?