Personal loan facts

Personal loans are those which are taken to serve some immediate purpose. There are about 10 banks in India which give personal loans. You will need to compare various factors like EMI, interest, loan amount etc to choose the best place to get your personal loan. It requires no collateral, but you will require submitting a number of documents. Large amounts can be taken as personal loans. In general, it has to be paid back within five years.

A personal loan is taken to serve some personal ends. It does not require any collateral and the money can be used to serve any personal ends. Often, the money is used for a wedding, to organize a holiday or to buy consumer durable goods. There are around 10 banks in India that offer personal loans to you without any security.

Advantages of personal loans-

General Advice on Personal Loan

If you have a big cash commitment, then personal loans are the best way to go. The various advantages of personal loans are as follows:

• You need not supply any security or collateral.
• Large amounts are available as loans. The amount of personal loans in India ranges between Rs. 50000 and Rs. 30 lakhs.
• The process is extremely simple and fast. Most personal loans are disbursed within a week. You require furnishing simple and easy documents only.
• There are no questions asked regarding the end use of the money. The bank is not concerned what you use the money for. It is only concerned with your ability to pay back the loan.

Choosing the best bank for your personal loan

Before you start applying for personal loan, it is necessary to choose the best bank for it. The process of choosing the best source of personal loans is as follows:

• First, check out the banks in your area who are giving personal loans. Sometimes, there may be limits on how much loan the bank can give. If you require money in excess of this, you should look for other banks.
• Gather data from all the banks in your area. Then compare among them to choose the best. Then apply to your chosen bank. Do not apply to a number of banks and then choose one.
• Check the EMI per month that you will need to pay. You can multiply this by the total tenure of the loan to know exactly how much you will be paying extra. You can do this for the different banks to find out where you need to pay the least.
• Most banks charge a processing fee to disburse your personal loan. Compare the fees of different banks to get an idea of the expenditure. There is no need to pay fees to any individual when you take out a personal loan.
• If there is a pressing need for money, then the time of disbursal of the loan can be an important consideration. Compare this time period for the different banks. A bank that sends representatives to your house to complete the process will likely get the matter done faster than a bank that asks you to visit the branch.
• Compare the prepayment charges for the different banks if you are planning to pay off your loan in lump sums. Opt for those that allow 0% prepayment charges.