What is the purpose of a personal loan?

Posted by Sharib Mirza on July 27th, 2016

Unlike a car loan, housing loan or an education loan, a personal loan caters to not just one but a variety of purposes. It can be availed for reasons like your child’s marriage, renovating your home, purchasing household items, hospitalization, or just a dream vacation that you would have planned with your family but couldn’t go for it due to lack of sufficient capital. A personal loan basically helps to serve any unforeseen financial circumstances. A personal loan can also be availed to bridge the gap of marginal money for a home loan, plot loan etc.

Just like any other type of loan, a personal loan has to be repaid within the given tenure and in the form of EMIs. To avail a personal loan, the candidate should draw a stable income each month. He/She should have an existing relationship. As far as documentation is concerned, the borrower has to submit identity and residential proof, latest salary slip, bank statement of the last six months. The loan application form can be filled online by visiting a relevant banking website. You may require a passport size photograph to attach to the application form. The age of the applicant should be between 22 years to 58 years. The borrower’s age at the time of maturity of the loan amount should not be more than 75 years.

Personal loan repayment tenure that most government banks offer is minimum 12 months and maximum 60 months. The maximum loan amount that you can avail in the form of a personal loan is INR 10,00,000 and minimum INR 50,000. Usually, personal loans come with a high rate of interest, choosing a government bank to avail personal loan may give some relief in terms of tenure and ROI. When it comes to documentation, personal loans require the least number of documents and are the fastest to get approved.

Personal loan can be easily availed via online tools. Fill the online loan application form by visiting the relevant banking website. Make sure you fill all the information appropriately without making any errors. Also, do not forget to attach the required documents, photocopies before submitting the form. Once the bank verifies all the details, it will send you a sanction letter. The processing time may vary from bank-to-bank. Once, sanctioned by the lender, the personal loan amount will get disbursed to your bank account. Hence, it is advisable to give true information to the lender while the time of availing the loan.

Before applying for the loan, take a look at your credit history. A good credit history can help you gain low rate of interest while a bad one can ruin your chance of availing a loan. Try to keep your credit history clear by repaying the loan on time as it is a major factor considered by mostly all the financial companies while sanctioning the loan. Credit history is taken into consideration while availing not just a personal loan but any other type of loan.

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Sharib Mirza

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Sharib Mirza
Joined: July 1st, 2016
Articles Posted: 19

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