How to Apply for Personal Loan in India ?
Mostly people do not opt for Personal Loan due to lack of information regarding it. Don’t worry you will get to know all about personal loans. The fact is that we can fulfill all of our personal needs by Personal Loan. Banks and some Private Finance Companies provide Personal Loans at different Interest Rates. Personal Loan can be applied for travelling, purchasing a Television, purchasing Jewelry, starting a Business. It can even help you to clear your Credit Card due payments. A minimum Personal Loan of Rs.50,000 and a maximum of Rs.5,00,000 can be applied for. Bank is not concerned about how you use this amount.
By the end of this Article you will know personal loans better, And you will know about:
- How to get Personal Loan?
- What precautions need to be taken when applying for a Personal Loan?
Understanding the Procedure:
Almost all banks in India provide Personal Loans. But each bank has a different procedure to provide the loan to you. You must understand all the rules and loan procedure of the Bank or Finance Company from where you intent to take Loan. If possible, carry the loan application form with you and read all the columns and information carefully. Only after understanding the complete rules and information, proceed with the procedure. This way you can get more informative about the loan and will know personal loans more.
Give your Priority to Regular Banks and Finance Companies:
Try to apply in the Bank where you operate your account. Normally, the Bank also gives priority to its regular and trusted customers. When you go to another Bank to apply for a loan, the bank would ask you, “Why didn’t you apply in your own Bank?” Other Bank may put on a lot of questions regarding this.
Know about the Interest Rates:
Every bank provides loan on different interest rates. Some banks have fixed interest rates, while others charge interest on reducing balance. Example (Interest on Reducing Balance) :- If you have taken a loan of Rs.1,00,000 and you have to pay an EMI of Rs.5000 per month. In this case, in the first month the interest rate will be applied on Rs.1,00,000. In the Second month, the interest rate will be applied on Rs.95,000. In this way, Interest rates will lower each month. Some banks also provide loans on Flat Rates (Fixed Interest Rates). Example (Flat rate Interest):- If you have taken a Loan of Rs.1,00,000 and you have to pay an EMI of Rs.5000 per month. In this case, interest rates will be charged on the capital amount of Rs.1,00,000.
EMI (Easy Monthly Installment):
Loan is directly related to your Income or Salary. So, we suggest you to choose your EMI based on your Income. Keep in mind that your EMI should not be more than 50% of your income.
Things to remember while paying EMI:
You must fix the date for every month on which your wish to pay your EMI. If you are a salaried person, and you get your salary on 5th of the month then you should fix a date between 7th and 10th of the month. If you don’t have a fixed date on which you get your Salary, then you should take care while fixing the date to submit your EMI. We are telling you this because if you do not submit your EMI on time, you may be charged with a penalty from the Bank. Once you have a negative image, you will have difficulties in getting Loan from banks.
Beware of Agents:
There are a lot of Agents in the market who do not belong to any Bank or Private Company. These are not even related to DSA. The motive of these Agents is to agree the customers to take Loan. Once the customer agrees, these agents take heavy commission. To be safe from such fraud, you must consult a trusted Financial Advisor or Chartered Accountant.
Hope this Article has cleared all your doubts regarding how to apply for personal loan in India.
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