What is a personal loan?
A personal loan is an unsecured and general purpose loan taken by individuals to meet their own personal needs. Unlike a home loan or car loan, its not secured against any asset. It is comparatively expensive, can be taken without security, collateral or guarantor and does not require lengthy paperwork.
For what purposes can I use personal loan?
Personal loan can be used for any personal financial need and the bank will not monitor the use of this fund. It can be utilized for any and all of your personal needs such as renovating your home, marriage related expenses, a family vacation, your child’s education, purchasing latest electronic gadgets or home appliances. It can be used to meet unexpected medical expenses or any other emergencies.
What are the eligibility criteria for personal loan?
The exact criteria vary from bank to bank. General criteria for personal loan are your age, your income / capacity to repay the loan, your occupation and place of residence.
What is the maximum loan duration allowed?
Typically, 60 months.
How soon is the loan amount disbursed?
Typically, within 7 working days of the loan application.
How much personal loan can I borrow?
Loan amount usually depends on your income and varies based on whether you are salaried or self-employed. Usually, the banks restrict the loan amount such that your EMI does not exceed 40-50% of your monthly income.
Can I apply jointly with my spouse?
Yes, you can take personal loan jointly with your spouse or parents and thereby you can also increase your loan eligibility amount by combining the income. The rules and conditions vary from bank to bank.
What is default interest rate for a personal loan?
Default rate is the rate of interest per annum that applies to overdue payments. Any overdue payment incurs interest at the default rate (which is higher than the usual interest rate).
Can I prepay my personal loan?
Yes, you can. However, some banks allow borrowers to prepay the loan only after certain number of repayments have been made on the loan. Some lenders do not allow partial prepayment. Prepayment charges may be levied on the outstanding loan amount.
Where can I apply for personal loan online?