Blog #Yes Bank Personal Loan

There are a lot of financing options available in the market. And a number of banks and NBFCs (Non-Banking Financial Companies) provide the same loan at different interest rates, making it confusing. However, a lot of loans have similar yet various alternatives for them. For example:- a personal loan is an unsecured loan, but you can get the funds from a secured gold loan. So both the personal loan and a gold loan are perfect alternatives for each other.

What is a gold loan?

A gold loan is a secured loan where funds are acquired by pledging a gold asset. The paperwork is significantly less, and you can quickly get your loan approved on the spot. The interest rate for gold is significantly less, but you'll have to make sure to pay your instalment on time. Because if you're unable to repay the loan amount, then your gold ornaments or coin will be seized by the bank and will be sold off at an auction to recover the loan amount.

Advantages of gold loan

Processing: Gold loan is an easy and fast processed loan. A lot of banks and NBFCs (Non-Banking Financial Companies) give gold loan facilities processed quickly. So you don't have to wait for days to get your loan approved. A lot of banks like Yes Bank Personal Loan approve your gold loan within one hour.

Credit Score: Credit score is a number between 300-900 that defines your creditworthiness. You don't have to maintain a good credit score to be eligible for a gold loan. You can get your gold loan application approved even if your credit score is low.

Interest Rate: The best thing about a gold loan is that you get low interest rates. The interest rate is very low compared to other banks, so you save a lot of money that you would've paid as interest. You can lower your interest even more if you pledge any other asset as a security.

Repayment: Banks offer flexible repayment options to the customers. So you can choose the EMI option and a loan tenure that is best for you. But it's advisable first to compare all the options and then select the right one for you.

Prepayment penalty: The bank charges no prepayment penalty. So you can quickly get a gold loan without paying a prepayment amount. Security:- You get a lot of benefits like free bank lockers. So you can store your gold safety in bank lockers and take it whenever you want it back.

What is a personal loan? 

A personal loan is an unsecured loan, so you don't have to pledge any assets to get funds from this loan. Instead, you'll have to maintain a decent credit score to get your loan approved. So if your credit score is high, then your personal loan can be quickly approved, but if your credit score is low, then a lot of banks will reject your loan application.

You'll have to repay the loan instalments on time because it will be negative, which will make it hard for you to get your future loans approved.

Advantages of personal loan

Collateral: Unlike a secured loan, you don't have to pledge any collateral to be eligible for a personal loan. This is the most significant advantage of a personal loan because not everyone has enough asset to risk. So this option makes a personal loan the most preferred choice when compared to other financial services.

Repayment: Banks offer a lot of repayment options to customers. So the customers are flexible in choosing any one of the given options. It's advisable first to calculate your budget and income using tools like a Personal Loan Calculator and then select the right option for you.

Hassle-free processing: You don't have to wait for months and months to get your loan approved. You can quickly get your personal loan application approved if you meet the eligibility criteria perfectly.

Paperwork: The paperwork and documentation required for a personal loan application are very little. So you don't have to stress yourself over the documentation process.

Conclusion

You can apply for a gold loan if you have gold ornaments to pledge and get funds immediately. You can apply for a gold loan if you have a bad credit score and you require funds. But if you don't have gold ornaments or any asset to pledge, then you can use your credit score to get a personal loan approved from any bank or NBFCs.
Also read this: Here Are Things To Know About A Personal Loan 

CIBIL Score

A CIBIL Score is a score ranging from 100-900, which is assessed by every financial institution, NBFCs or bank before approving any loan. A high CIBIL Score depicts a borrowers creditworthiness, and a poor CIBIL score represents the previous or current defaults. A score of 700 is highly favorable for getting a quick disbursal of a loan.
A credit bureau computes the CIBIL Score of a potential individual depending on one's credit history. A credit bureau is highly regarded for its accuracy and transparency while evaluating this Score. A number of enquiries made to analyze this Score are also mentioned in the report.
A CIBIL Score is one of the eligibility parameters in Personal loan eligibility.

Importance of CIBIL Score

A CIBIL score serves as a report card for your financial honesty. It is a signal that notifies a lender either 'yes, you may grant the loan' or 'no, he/she does not appear to be able to repay on time.'

1. For quick Loan Approval- While applying to loans that don't have any security involved is assessed with a CIBIL Score. A Credit track record helps in reviewing one's potential and past defaults while sanctioning an unsecured loan. The overall process becomes complicated with a Credit history containing defaults and having a score less than 350. 

2. Secured and Unsecured Loans- CIBIL Score is mandatory for secured loans and unsecured loans as one has a mortgage involved whereas the other doesn't. This Score helps in evaluating the risk of the loan which the creditor poses while lending. A good credit profile signifies the borrower's repayment ability to complete the debt obligation in the given term. 

3. Negotiating the rate of interest- The interest rate varies from banks to banks and mainly depends on the applicant's profile at loan approval. Having a good CIBIL Score can help you negotiate the rate of interest and acquire a great deal. 

4. Less costly Insurance Premium- Insurance is vital while availing of any loans. It is a crucial financial instrument that covers your debt and dues when you are unable to pay them or deceased, depending on the insurance's policy. Depending on the borrower's credibility, repayment history and defaults, a lower premium can be availed.

CIBIL Score- Effective ways for improving It

A poor credit rating can be raised by performing the following things. It is important to know that it will take at least six months to notice a significant difference in your credit score and 'improvements' on your credit report.

a. Obtain your most recent credit report- This will help you estimate your current report and assist you in managing your finances and minimizing errors. You can evaluate the reasons behind your low credit score and the reasons behind it. 

b. Never postpone payments- You can't give excuses for late repayments as the bank charges a surplus amount on every late repayment. So don't slip into the habit of making late repayments of your debt, as it can lower your CIBIL Score and charge a hefty amount as a penalty.  

c. Maintain a varied credit portfolio- A portfolio will help the creditor/lender in estimating your creditworthiness and your debt obligation. d. Avoid having unused credit cards. It is no use in keeping several credit cards when you don't use or require them as you will spend unnecessary annual charges over it. 

e. Debt management that is savvy- If you manage your debt consolidation smartly, you won't be facing any burden while making repayments. A credit card can also imply revolving credit which will eventually have a negative impact. Completing the debt with a personal loan is an effective way for meeting your obligations where less interest rates will be incurred. 

f. Don't opt for longer term- A loan term can have a direct impact because of the incurring interest on the loan amount. If you avail a loan of 3 years and mid-way extended it, then it will have surplus interest charges imposed on it with extension charges.

Thus, to obtain a Yes bank personal loan, one can improve his/her creditworthiness through the factors mentioned above.

Also read this: The Right Lender For Obtaining A Personal Loan 

It is often that when after availing a personal loan, one blames the financial institution that it is having an issue or is not good. Still, the fact is that all the terms and conditions and the requirements are already highlighted correctly from the bank's side.

They do it to help the customers only so that they should not get harassed or become bewildered, and the situation does not become like that at the first time they are noticing something which was not appropriately informed. While going for any kind of personal loan for any good calls to help any family member or for self-consumption, only good things need to be followed up accordingly.

All types of loans come with a set of steps which needs to be followed and with all the information these things are done, there will be not a single kind of problem while repayment of the loan which a maximum of 70% of the world's customers faces. First and foremost, the eligibility check needs to be done as the different banks have additional eligibility for the personal loan according to their ability.

The bank's eligibility age for getting a personal loan is between the average range of 18 to 70 years. The person must be a citizen of India and must be holding The Identity card, which proves this.

Things to be checked

After checking the eligibility criteria, one can do the task of Personal Loan Apply Online; there needs to be for checking the types of interest rate calculating and the value of the interest rates and other charges that a bank and financial institution will charge different kinds of situations. There are many banks where the foreclosure charges are being set to repay the loan at a period much more before the expiry term.

This may add some costs, but it will save a person from the rest of the interest payments for that which will be paid per month in EMI instalments. Yes Bank Personal Loan has unique features for all sections of society. The rate of interest comparison is very much significant.

Previously, a person needed to move from one place to another or travel to know the EMI amount that a person will be paying. Nowadays, the official websites of The financial institutions from where the loan will be availed are provided which an EMI calculator where the loan amount tenure and the rate of interest are only required to put into the blank cells of the online calculators and the results of the status will be within few seconds to minutes.

There are different types of documents that will be asked for the verification and the background check, which may include:

Filled up personal loan application of the personal loan

• Age proof
• Address proof
• Identity proof
• Salary slip
• Form 16
• Income tax return and the processing fee cheque
• Recent passport size photographs

Besides this, few things need to be checked before availing of the loan. In these factors, the government has made specific changes or relaxations since the last year of the pandemic to provide some relief. The customers can also avail the loan repayment structure procedure and without any burden.

Trends

Frequent meetings and circulars have already been distributed in the form of online hue. The staff of The financial institutions and the customers remain safe to reduce the infection rate in the country.

Previously a customer of the applicant must have maintained a good credit score to avail a loan at a meagre rate of interest because a good credit score shows that the reputation of the customer is good in repayment of the loans without any kind of delays in the past. The credit score is not good, then the customers should delay the loan and arrange for small types of loans like that of gold loan and other durable goods loans and repay it and then on the building of the excellent credit score can apply back for the personal loan.

Conclusion

The other things like that of other types of hidden and mandatory costs like processing costs for the payment cost extra should be known before time in. Evaluating the correct loan amount staying away from the tricky and expensive offers as it may include a high rate of interest and the ability to repay the loan must be well examined and then entered in the field of getting any kind of financial so that the things move alright.

Must Read:- Documentation Process In Personal Loan