There are lots of Personal loan benefits. It can be used in numerous ways such as for a holiday trip, buying furniture, renovating the house, medical emergency, etc.
Benefits of Personal Loan
One of the benefits of a personal loan is end-use unlimited. You get the cash & you use it for any purpose; not like home loans & like. This is just one instance, there are many out there. Whenever you have an urgent requirement of funds cash it out.
Meeting the eligibility & credit score, in 72 hrs you’ll receive the loan. Some banks even provide online approval of personal loans for former customers.
Keep collateral away
Since it is an unsecured loan, you need no collateral; see, so easy to get.
Choose tenure seems never so easy
The maximum limit of the tenure is 7 yrs, henceforth choose it as it is relevant to you. Tenure & EMI are related in direct proportions. Seek EMI first and then go for tenure. Use our EMI Calculator to calculate the EMI.
A fixed-rate of interest
A personal loan is generally available at a fixed rate of interest. So the equated monthly installments will remain fixed for the entire loan tenure. Therefore you don’t have to worry about the interest rate changes.
If you use the personal loan for the construction, renovation of the house, or making down payment for the house, you can avail the tax deduction of up to INR 2 lakh under Section 24B for the interesting part in a financial year. But remember that you will have to provide enough documents to prove that the money has been utilized for that purpose only.
Eligibility Criteria for Personal Loan
Banks give the personal loan to:
- An individual
- Self-employed professionals, and
However, different banks have different criteria for providing personal loans. The following are the most commonly used criteria by banks for individuals:
Personal Loan’s Amount & Loan Period
Loans range from a few thousand to hundred-thousands. While applying for a personal loan, the amount that you apply for must be commensurate with your ability to make repayments. Of course, the final loan amount that is approved depends on the lending criteria used by the bank/NBFC and how they evaluate your ability to repay the loan.
These loans are normally short-term loans with the tenure of 1-5 yrs
Factors influencing personal loan’s approval
a.) Do you have a personal loan credit score of more than or equal to 750? The higher your score, the better are your chances of being approved.
b.) Your employment is also an important factor in the loan-approval process. Since personal loan customers do not provide any collateral, lenders need to make sure that you will have a steady job over the loan period. It is probably a good idea to be with the same employer for at least a year before you apply for a personal loan.
c.) Your annual income: Again, since there is no collateral, the banks want to be assured that you have a sufficient income (from salary and other sources) that will allow you to make your monthly repayments. The higher your income, the better your chances of being approved for a personal loan.
d.) Your EMI payment record: Lenders will look at your credit report to check if you have consistently demonstrated financial discipline and a pattern of timely EMI payments. Your experience gives an added advantage in any field.