Manish Damani

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4 factors affecting personal interest rates

Whenever you face a cash crunch, the quickest and easiest solution is to go for personal loans. Banks and other financial institutions grant the credit immediately. You do not have to provide the purpose for taking the loan. All this sounds great, but there is a catch – interest rates. Considering personal loans are unsecured and does not involve any collateral, the interest rates are usually towards the higher end.

Personal loan interest rates tend to fluctuate as per the base rate. It is not fixed as opposed to home and auto loans.

The 4 major factors that affect personal loan rates are:

1)      Income: Lenders lay a lot of emphasis on the income of the applicant as it decides if they can repay the loan amount on time. If you earn a stable salary, that is around INR 35,000 to INR 50,000; you may receive an affordable rate. However, if you earn above INR 1 lakh, you can negotiate to lower the interest rates further. Lenders also offer competitive interest rates to those who earn above INR 1 lakh.  

 2)      Credit history: This is the second most important factor that determines your personal loan interest rates. To get a personal loan, you need to have a solid credit history in place. It reflects on your payment behaviour. CIBIL agencies conduct the calculations. They consider your repayment of past or existing loans and payment of credit card bills. If CIBIL finds any default payment or outstanding dues, they inform the lenders about the same. That will lead them to reject your application.

 3)      Employment: Some lenders have a special relationship with an organisation or company. If lenders find you are working for any such company, they will approve your loan immediately and offer you the same at a low-interest rate. Lenders consider such employees to have a more stable career, making them responsible towards their debts,

 4)      Relationship with the lender: Before opting for a personal loan, you might be already holding an account with the bank. You are the banks’ loyal customer. You share an interpersonal relationship with the bank manager automatically. That surely provides you with some leverage when you take a personal loan from the bank. Even banks offer you low personal loan rates as they do want to lose their loyal customer.

Now that you know how important personal loan interest rates are, you should also judiciously choose a plan that suits your comforts. Since different lenders offer different rates, you should compare them on third-party websites and then opt for the best policy.

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Top 4 lenders offering personal loans for low-salaried professionals

You never know when an unexpected need for funds might knock your door. Many times, we do not have the sufficient funds, and it is not possible to rely on our savings now and then. This is why personal loans play a crucial role here. However, every bank and non-banking financial company (NBFC) have certain personal loan eligibility criteria set before granting the credit. Unless you do not meet those conditions, you are not eligible to get the loan.

If you are someone who is still in their first job and are barely earning any income, how do can you apply for a personal loan? Generally, personal loan for salaried professionals is easy to acquire as they have a stable income and employment in place. But are there lenders who offer low-salary personal loans as well?

Luckily, there are quite a few lenders who offer personal loans to such individuals.

Some of the top lenders are:

1)      Axis Bank: If you are looking for a hassle-free application and documentation process, then Axis Bank is the place to be. Their loan amount ranges from INR 15,000 to INR 50 lakh. You can apply for the loan when you are 21 years old, and the repayment tenures are flexible as well. Interest rates are attractive, and you get the benefit of transferring the balance under Axis Bank personal loan. You do not have to bother about pre-payment and foreclosure charges.

 2)      Bajaj Finserv: The NBFC company leading in the personal loan for low-income professionals is Bajaj Finserv. They offer loans to individuals up to INR 10 lakh. You can get the loan within 24 hours along with flexible repayment opportunities. There are no hidden charges as well. Also, you can apply for a personal loan online as well that are disbursed quickly.

 3)      HDFC Bank: They are known for providing personal loans with competitive interest rates with zero hidden charges. The best is that you have the personal loan online application provision here, that allows even first-time borrowers to get the loan instantly. They also have special schemes for women applicants who can get pre-approved loans under diva personal loan.

 4)      Fullerton India: Since its inception, Fullerton India, has been fulfilling their customers' dreams. They are spread out over 600 towns in India with 400 branches. They are one of the prominent NBFC company in the loan market. They have flexible tenures and approve the loans within 24 to 48 hours. Fullerton India’s relationship manager guides you with the loan products based on the financial profile of the individual. Those who have an existing rapport with Fullerton India can gain additional benefits.

All in all, you do not need to earn in lakhs or crores to get a personal loan

. If you meet the basic requirements, you can comb through the various options and opt for the one that is suitable for you.

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5 points to remember to become the most eligible personal loan borrower

One of the popular types of loans availed of by people is personal loans. There are several reasons as to why personal loans have become the latest buzzword:

1)      There is no restriction on the end use of the loan funds provided

2)      Personal loans are known as ‘all-purpose loans.’ That is, you can use it for any purpose such as a long-due vacation, funding a family function or wedding, purchasing a vehicle, clearing outstanding dues, refurbishing the house, and other such reasons

3)      Also, the reason why personal loans are popular is that they are unsecured. You do not have to keep any asset as a security

4)      The documentation is minimal as there is no involvement of collateral

Applying for a personal loan is a hassle-free process. Also, the interest rates are affordable. However, banks and non-banking financial companies (NBFCs) have certain personal loan eligibility criterions in place to determine if the applicant can get the loan.

Following are some basic personal loan eligibility pointers that you need to fulfil to obtain a personal loan:

1)      Age: The younger you are the more eligible you are to receive the credit as you have several years ahead to earn and repay the loan. Generally, the age limit for personal loans is 21-60 years for salaried individuals and 25 to 65 years for independent workers.

 2)      Employment: It is the most crucial personal loan eligibility factor that the lenders consider before approving the loan. Salaried people should be employed with their current organisation for at least 2 years whereas self-employed professionals should be running their existing business for 5 years in order to acquire the loan. If salaried people are working for a reputed firm, you may receive the credit immediately.

 3)      Credit report: This is another aspect that holds a lot of value for lenders. Firstly, what is a credit score? It is a summary of your past credit card bill payments, existing loan payments, etc. You have to ensure these are paid in a timely fashion to stand a chance to get the loan. If your score is anywhere between 700 to 900, lenders will consider you a creditworthy person and grant you the loan. In case the report portrays any default payment records, substantial outstanding, fraudulent activities, be prepared for rejection from the lenders end.

 4)      Financial profile: Apart from your current financial standing, the records also play a crucial role in lenders taking a call to approve of your loan. If you hold a good economic record, it will eradicate your poor ratings and will increase your personal loan eligibility. If you are irregular with your payments, lenders will refrain from offering you the loan.

5)      Organisation/firm: The best way to gauge the eligibility of an applicant is the company that he/she is working with. If you are part of a reputed firm or a high-profit business, you are guaranteed to receive the loan.

Lenders also have the personal loan eligibility calculator tool on their website that enables the customers to check their eligibility for the loan. It helps you understand different loan repayment combinations and guide you to pick the best scheme.

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Personal loan EMI calculators and amortisation table

We use a personal loan to meet our out-of-reach financial needs like debt consolidation, wedding expenses, medical costs, and other such short and long-term goals. The reason people prefer personal loan over any other financial instrument is that of its flexible loan tenures, minimal documentation and quick application process. Unlike the home and auto loans, personal loan mandates are usually for 1 to 5 years.

With the advent of technology, humans are spoilt for choices. It has become difficult for the consumers to make a judicious decision. You go online, and you can find an array of options in the third-party websites. So, how to zero down on a prospect? This is where a personal loan EMI calculator comes into the picture.

What are personal loan EMI calculators all about?

The equated monthly instalments (EMIs) assist you in planning your finance. You can check the overall money you have to pay towards your loan along with interest to the lender. The parameters involved in the personal loan EMI calculator are:

-          Principal amount: This is the loan amount you seek

-          Interest rate: Here you enter the interest offered by the lender

-          Tenure: Since the personal loan tenures are flexible, you can choose the mandate as per your convenience  

-          Additional charges: These include your pre-closure and foreclosure fees

Now, these EMIs are paid to lender based on the loan amortisation table. They give you a structured view of the loan amount. It shows how you initially repay more towards your interest rate and as the loan matures you repay the loan amount.

So, how is this EMI calculator for personal loan and amortisation tables connected?

The amortisation table splits your loan repayment into two parts: years and months. It gives a clear picture of the overall amount you repay on a yearly basis. It also shows how the lenders utilise your EMIs. You can check how much of EMI goes towards the interest and the principal amount respectively. Lastly, you will know how the loan repayment will progress over time and what you will owe at the end of the tenure.

The 4 major components of the amortisation tables are:

1)      Start balance: It is the amount you owe to the lender at the beginning of the loan period

2)      Interest: This is mainly the portion of EMI that goes towards your interest rate. This chunk will keep reducing as the personal loan matures

3)      Primary amount: It speaks about the money that you repay against your principal amount. This keeps increasing gradually

4)      End balance: It is the impending money towards the end of a tenure that you have to compensate at the end of the mandate

Note: You can also view the amortisation table in a yearly fashion.

Before you jump to conclusions, opt for a loan after using the EMI calculator for personal loan. It gives you in-depth analysis of your money used and appeases your uncertainties.

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How can salaried professionals apply for personal loans?

The need for immediate funding can arise at any turn of your life, it may be for a wedding, a holiday with the family, your child’s education or a medical emergency. In situations such as these, the funding you have in your bank account may not be sufficient. Personal loans are an effective way to generate immediate funding for any type of situation. The personal loan eligibility of a salaried employee is a very important aspect that needs to be considered before applying for the loan.

A personal loan is a type of unsecured loan provided by a bank or a non-banking financial company (NBFC) to an individual without the need for any type of collateral or security. The funds offered by the financial institution can be used for any reason. Most of the salaried customers are eligible for a personal loan. Personal loan eligibility depends on the monthly income of the salaried individual and other factors such as employment history, credit history.  

The terms of getting a personal loan for salaried employees depends on various factors such as the number of years of employment, monthly income, the value of the organization where the individual is employed. However, some banks may require loan applicants to have a certain minimum income level or employment history to get the loan approved. If you are a salaried employee with an urgent need of financial support, a personal loan will be your best go to solution.  

The key reasons why individuals prefer going for a personal loan are:

1.      Less documentation :

The process of applying for a personal loan is hassle free, and requires minimum amounts of documentation

 2.      Quick processing :

A personal loan can be disbursed into the account of an individual with a day or two acknowledging the urgency for the required funding.

 3.      Flexibility of use :

These loans can be used for any personal legal reasons without a need for an explanation.

 4.      No collateral :

Since it is an unsecured loan, a personal loan does not need any type of collateral or security to be provided to the bank.

 5.      Shorter tenures :

Personal loans have high interest rates, which means the loans have short tenures for repayment, and it’ll be mostly allotted to the individual while they are still employed making it easier for them to pay back the loan in a short period of time.

Basic criteria for personal loan eligibility online as well as offline:

1.      Age :

For a salaried individual, the age requirement is between 12-60, mostly the period where the individual is employed.

2.      Income requirements :

Monthly income should be between 25,000-60,000. These ranges may differ depending on the amount of loan.

3.      Additional requirements :

Credit history, and the number of years of employment, loan amount and net monthly income.

Salaried employees can check their personal loan eligibility online through various sites that offer the feature of eligibility calculators before going ahead with the plan of applying for a personal loan. There are certain set eligibility criteria’s that are made by banks and NBFCs that the salaried employees need to make sure they fall under for the loan to get approved by the banks.

The application of personal loans these days can be done online, and the loans will be approved and disbursed into your account within a span of a day or two. The tenures for a personal loan will lie between 1 to 5 years, with a high interest rate so the salaried employee will be able to pay off the loan during their term of employment making it easy for the employee to pay off the loan while having a steady flow of income.

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5 best personal loans for salaried employees

A personal loan is the most common type of loan taken out from banks and non-finance banking institutions, by borrowers who are in immediate need of cash. These loans help the borrowers to meet their personal and private expenses. Personal loans are typically unsecured in nature and can be availed quickly. However, the rate of interest on personal loan is generally higher than those on secured loans. Furthermore, both salaried and self-employed individuals can conveniently apply for a personal loan online.

In this article, we have curated the 5 best personal loans for salaried individuals:  

SBI Personal Loan: The State Bank of India is one of the largest banking institutions in the country. SBI offers salaried employee’s personal loans with a competitive interest rate. The processing fees levied by the bank are also affordable and borrowers can opt for a loan tenure lasting from 6 to 48 months. The minimum personal loan amount a borrower can avail is INR 10,000 whereas the maximum is INR 1,500,000*.

Fullerton India: A popular non-banking financing company, Fullerton India offers all kinds of loans to both salaried and self-employed individuals at competitive rates. The personal loan for salaried individuals is offered at an interest rate of 17.25 per cent* with a small processing fee of up to 2 per cent*. Salaried employees can avail the loan for 12-48 months with a minimum loan amount of INR 1 lakh. The NBFC offers a maximum personal loan amount of INR 2 crore.

Kotak Mahindra Bank: One of the strongest players in the private banking statement, Kotak Mahindra Bank is already known for offering the best interest rates on savings accounts. This private bank offers personal loans that are flexible and simple. Loans can be repaid in tenures of 12 to 60 months with minimum and maximum amounts of INR 1 lakh and INR 1.50 crore respectively.

Bajaj Finserv: Bajaj Finserv also known as Bajaj Finance is also a NBFC entity. The company is known for offering low rate of interest to individuals working with reputed organizations. Personal loans for salaried employees, too, receive lucrative interest rates. The company offers loans for tenures of 24-60 months. Borrowers must avail a minimum loan of INR 1 lakh and a maximum loan of INR 2.5 crore.

Tata Capital:

One of the most reputed NBFC organizations, Tata Capital offers personal loans to meet all your necessary personal requirements. The NBFC offers personal loans starting with an interest rate of 11.99 per cent* which can be checked with the help of a personal loan EMI calculator. Loans can be repaid in tenures of 12 to 60 months. The company offers loan amounts of minimum INR 75,000 to maximum INR 2 crore.

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What is the difference between personal loan for salaried and self-employed individuals?

For people in need of urgent financial assistance, there is nothing more suitable than a personal loan. Banks and non-banking finance institutions provide borrowers with flexible borrowing options that can help the borrower meet his temporary requirements. Lenders provide personal loans for salaried as well as self-employed individuals based on several key factors like the borrower’s income level, capacity for repayment, credit history, and employment history, etc. All these factors typically affect the rate of interest offered. Following are the differences between personal loans offered to salaried and self-employed individuals

The age criteria: Every lending institution has its own predetermined age criteria for making a loan available to a borrower. This is typically regarded as a minimum and maximum age criterion and the borrower, whether salaried or self-employed, must fit into the predetermined age bracket. The age limit for availing a personal loan online or offline is usually lower for salaried individuals as opposed to the self-employed ones. Most institutions offer these loans to borrowers between the minimum and maximum ages of 21-60 in case of salaried individuals, whereas self-employed individuals typically fall in the age bracket of 23-65 years.

The income criteria: Since businesses are generally associated with uncertainties and risks, lenders typically expect self-employed individuals to show their income in terms of their annual turnover. The interest rate and loan sanctioned for self-employed individuals, is therefore on the basis of a pre-determined annual turnover e.g. INR 10 lakh per annum. Salaried individuals, on the other hand, must fall within a minimum monthly income bracket e.g. a salaried individual, availing a loan, must make a minimum of INR 25,000 per month to be eligible for a personal loan online or offline.

The documentation criteria: Both, salaried and self-employed individuals availing a loan must submit a set of documents along with their personal loan application. These documents, more or less, remain the same for both kind of borrowers which include the proof of address and proof of identity. However, the major differences between the two categories are as under:

For salaried employees

·         Pay slips of the last three to six months

·         Salary account statements for the last 6 months

·         Latest form 16 along with income computation

For self-employed individuals

·         CA certified income computation and profit and loss statement of the last two years and balance sheets

·         Qualification proofs for professionals like CAs, lawyers and doctors

·         Bank statements of the last six months

The rate of interest criteria:

Salaried individuals can get a decent rate of interest based upon the reputation of the organisation they are employed with whereas for self-employed individuals, the borrower considers the domain of their business and determines the rate of interest. The rate of interest offered to self-employed individuals is generally higher than that offered to a salaried individual. Both borrowers can check their interest rates with the help of an online loan borrowing tool known as personal loan EMI calculator.

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5 benefits of personal loan online application

Are you planning a vacation and strapped for cash a little? Do you have your eye on that latest electronic item, but are falling short of money? Well, you need not worry. You can just take out a personal loan. Today, almost every bank and lending institution is offering finance to loan seekers with the click of a few buttons. It is no wonder that personal loans have become a very popular option.  All you have to do is login to the lender’s website and follow the instructions. Following are the five benefits of applying for a personal loan online.

It is extremely convenient: It is possible to have the loan amount credited into your account simply by visiting the lender’s website and filling an online loan application form. The documentation process is also simple and convenient, where in you can attach scanned copies of your documents along with the application form. Without stepping foot out of your home, the loan amount is easily and quickly disbursed. Most lenders disburse the amount in under 4 hours or so. This facility is especially beneficial to those borrowers who are pressed for time and cannot visit the bank frequently.

You can compare the interest rates online: You don’t need to meet the personnel at the lending institution to discuss the rate of interest or tenure. Simply compare the interest rates, fees and charges etc. by using an online personal loan EMI calculator on the lender’s website. Comparing the rate of interest and fees of the different lenders allows you to make a well-informed decision of the amount to borrow and the ideal tenure and interest rates.

Access to information: Every lender uploads all the necessary loan-related information on their websites. This gives you access to the information pertaining to everything related to the loan from eligibility and documentation to interest rates, fees and charges and the various repayment options. This helps the borrower make an informed choice after considering the lender’s reputation and the benefits offered.

EMI amount calculation: As we mentioned above, all banks and finance institutions have an online digital calculation tool, known as an EMI calculator. This tool helps the borrower identify his monthly EMIs. All you have to do is input the details such as the principal amount you wish to borrow, along with a rate of interest and tenure that suits you. The EMI calculator for personal loan simplifies the process of calculation which is otherwise complex and cumbersome.

Lower rates of interest:

Many borrowers, who apply for their personal loan online, also enjoy an extra advantage unavailable to those visiting the finance institution. As such, the rate of interest are reduced for online applicants as the lenders do not have to bear the additional costs which are associated with physical expenses. Furthermore, the loan processing fees and additional charges are also waived off sometimes. Lower rate of interest results in lower EMIs.

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7 things you should know before taking a personal loan

Getting a personal loan online is very easy these days. It is possible to get funds just by making an application online. With easy online approvals and instant disbursement within 72 hours, a personal loan for salaried employees is the best ways of getting funds.

Each loan comes with its riders, and it is best to apply for a loan only once you know them. Before applying for a personal loan, there are a few things you must know.

1.     Eligibility criteria:

Personal loans are sanctioned on eligibility criteria. The age, occupation, place of employment, earnings per month, a financial position to ascertain repayment capacity, etc. Based on these factors, the lenders determine the amount to be lent to the applicant.

2.     Monetary limits:

Personal loans for salaried can go up to Rs. 20 lakhs and those for self-employed can go up to Rs. 30 lakhs. Each lender sets their own minimum amount for disbursing loans.

3.     Typical Loan tenure:

The minimum loan tenure in most cases is 12 months, and the maximum is 48 or 60 months. If you have a good relationship with the lender, you can negotiate on this point.

4.     Interest Rate:

Some NBFCs offer personal loans for as low as 11-11.5%, and the rates can go as high as 20-30%. The interest rate depends on the eligibility criteria for the loan, especially the applicant’s ability to repay the loan. If you show sufficient repayment capacity, in terms of payslips, or adequate incomes, the lender can give a lower rate of interest. Personal loans do not have any collateral. This is why the rate of interest on these loans is usually higher since they are more risky for the lender.

5.     Prepayment/Foreclosure:

Prepaying a personal loan is possible. Each lender has different guidelines about pre-paying the loan. Some lenders may charge prepayment penalties or charges, so if you decide to prepay the loan, consider the extra interest to be paid for these penalties.

 6.     Credit score:

Personal loans depend on the credit score of the individual. Your credit score depends on your repayment history, and how you repaid existing loans or credit card debts. Defaulting on a personal loan instalment shows in the credit report. Hence, you must be very careful while applying.

7.     Documents required:

Some of the documents required are:

·         Age proof (eg. PAN or passport)

·         Income proof (business accounts, payslips)

·         Bank account statement for 6 months

·         Address proof (eg. Electric bill, telephone bill)

·         Identity proof (eg. Passport, voter ID, driving licence, PAN)

·         Income tax returns for last 3 years

By considering these points, you can make sure you apply for the personal loan that meets your needs to the best extent possible.

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A quick guide to personal loans for a salaried employee

Whether funds are required for a wedding, travel, home improvement, child’s education or medical requirements, personal loans are the ideal solution. Loans are provided by the banks to fulfill your short or long-term needs. They give the mortgage without any collaterals or security as they are unsecured. However, while one can accomplish their particular goals via these loans, companies and organisations are exempt from these benefits.

Who is a salaried employee?

Salaried employees are those who are paid a fixed amount by an employer. They are usually paid regularly or bi-weekly or on a monthly basis. These individuals fall under the 9-5 category and are different from self-employed ones who are the usually the boss of their work.

Personal loans are provided to salaried as well as self-employed people. However, a personal loan for salaried employees requires certain documents and has some criteria’s. Let us study those.

Salaried individuals need to keep the following identity, residence and financial proofs handy:

1)      Passport

2)      Voters ID

3)      PAN card

4)      Driving license

5)      Utility Bill

6)      Ration Card

7)      Property documents

8)      Electricity bill

9)      Salary slips of past 3 months along with form 16

10)  Employment certificate from current employer

11)  Bank statement of past 6 months

12)  Proof of investment

13)  One coloured passport size photograph

Personal loan for salaried individuals also has some eligibility criteria that might vary bank to bank. Here is the criteria for the same.

1)      Should be employed in the current job for more than two years.

2)      Individuals should fall under age gap 21 to 60 years.

3)      Those whose financial documents involve no outstanding, fraudulent track records, receive a loan with more flexible tenure, low EMI and interest rates.

4)      Employees are in a win-win situation if he/she is associated with a reputed and high turnover company. These salaried people can get quick access to personal loans.

The methods to acquire a personal loan for salaried employees are net banking, visiting the bank branch and ATM. However, it is advisable for the salaried individuals to keep specific tips in mind before applying for the loan. Here are some tips to know.

1)      Do window shopping: Just as we do window shopping before purchasing the perfect clothes, ensure to check the different interest rates offered by various banks. Considering personal loans are unsecured, they have higher interest rates. Check with the bank if they can provide low-interest rate if you are their regular customer

 2)      Cleverly choose EMIs: If you feel you might not be able to pay EMIs, try to extend your loan tenure. Stick to the loan amount you wish to apply. Do not fall for attractive offers such as add-ons. They will only add to your EMI.

 3)      Improve credit score: The lender will verify your credit score before processing the loan. If the score is high, they will reduce the interest rate. It is recommendable to check the credit score before applying for the loan. One of the ways to improve your credit score is by not applying in too many banks to avail the best interest rates. By doing so, your credit score can get hampered.

Salaried employees receive a fixed income that restrains them from defined benefits. Before gaining access to a personal loan for salaried employees, ensure if you can make a timely repayment. Personal loans are the perfect financial luxury tool. They act as your best partner during emergencies.

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6 benefits of applying for personal loans online

Europe is the perfect destination to head to during summer. It is a dream location to explore for almost everyone. With the onset of summer, comes the dreams of visiting the destination. Ever wondered why it is still a dream? Family holiday means expenses. The money in a regular bank account may not be enough for your dream holiday.

How about opting for personal loans? Personal loan comes handy for buying furniture, financing marriage or revamping your home. Personal loans also act as a best friend for executing your impending vacations. So, how does one go about to apply for personal loan?

Personal loans are the most convenient tool for securing quick cash. The process has been simplified further, thanks to digitization. Nowadays, one can do away with visiting the bank personally and the tedious documentation process related to it. Online personal loan comes with its benefits:  

Easy access and confidential: Online has made an ordinary man more relaxed. When there is a wedding at home, certain expenses are kept aside specifically for the event. However, additional costs do not always knock the door and arrive. Banks are not always accessible during emergencies. Personal loan can bail you out. These loans are approved instantly. Also, one need not disclose the purpose when applying online.

Access to information: Right from charges, interest rates, loan eligibility, documentation and repayment options, all information is available under one roof. Before going offline, lenders are well-informed for making a choice.

Lower Interests rates: To apply for personal loan, one needs to compare the rate of interest. The best benefit a loan seeker receives is lower rate of interests. Additional benefits of applying for a personal loan online, include lower EMIs. Therefore, borrowers can repay the smaller amount with the help of lower interest rates.

EMI calculator: With easy application of personal loans, comes a digital tool called EMI loan calculator. It helps in identifying monthly EMI. A somewhat cumbersome process is now simplified with loan calculator instrument issued by banks and lenders.

Easy documentation process: While applying for personal loans, one needs to submit their residence address, identity proof and show their income. The online procedure needs only your credit score. If you possess an excellent credit score, there are higher chances of the loans getting approved instantly.

Several loan options: Human needs are never-ending. From refurbishing home to the big fat wedding to exploring the world, everything is attached to a loan. Wedding, holiday, festival, consumer durables, home renovation, business loans are some of the options that borrowers can avail online. When one chooses to apply for personal loan online, it is better to deal with the most suitable one.

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Why do you need to shop around for a personal loan before applying for one?

Personal loan can be your ideal financial aid, whether you are looking to achieve your dream or are in need in cash due to some emergency. You may want to get some renovation done at your home or you may be looking for a way to finance your child’s education, both of which can be done through a proper personal loan. However, you need to shop around and get as much information as you can before you apply for personal loan, so that you can enjoy a hassle-free loan application procedure. The following are some of the things you can do to make sure that you apply for the personal loan that is the best for your requirements.

·         Compare APRs and rates

APR or Annual Percentage Rate refers to the annual rate of interest on the loan amount. The interest rates on personal loans are usually higher than on any other loans. When you apply for personal loan online, you also get the ability to compare the rates of interest charged by the different lenders out there. Some lenders may charge higher interest, but may also offer a longer duration for loan repayment, while others may charge lower interest but allow a very short time-frame for paying off the debt. So, you should look around and choose the one that suits your needs the best.

·         Determine the loan amount

Before applying for a personal loan, make sure you know what you want the money for and also determine exactly how much you need. Do not go overboard when applying for a personal loan and only take as much as you would be able to pay back without any financial strain.

·        Enquire about pre-payment charges

Pre-payment is a procedure through which a large portion of a loan is settled through a single transaction, while the rest is settled through EMIs. Most lenders allow you to pre-pay a loan if you have the necessary funds for the same. This reduces the tenure for the repayment and the interest that you would have to pay. For the same reason, most lenders also charge a penalty or fee for pre-payment.

·        Look for PPI

PPI or Payment Protection Insurance covers your credit card reimbursement or monthly loan if you fail to settle them due to unemployment or sickness. If you feel like getting a protection insurance, you must look around for the most economic deal. For instance, purchasing a policy from a single loan provider will cost you much less than buying it directly from the lender. However, PPIs come with many exclusions. So, be absolutely sure of the terms and conditions before applying for the loan.

·        Consider your credit rating

The credit rating is a measurement of how good you are with paying back loans. Your credit rating is determined through the credit card payments and the loan repayment for past loans that you may have taken. So, before you apply for personal loan[SR2] , check what your credit score looks like. If it is below 750, you need to improve the same by taking smaller loans and paying them back on time.

·        Personal loan EMI calculator

A personal loan EMI calculator will tell you the EMI that you would need to pay for such a loan. All you need to do is insert the principal sum being lent, the rate of interest charged and the duration for the loan into the calculator.

Before you apply for personal loan online, always remember that personal loans are undoubtedly useful, but that certainly does not mean you keep borrowing money with or without reason. Borrow only as much as you need to make sure that the monthly interests don’t land you in a financial pickle.

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How to ensure a guaranteed approval on your personal loan application?

Personal loans are a great way to finance your dream vacation or your new business. You can apply for these loans in a hassle free manner if you are aware of the things that lenders check in case of such an application. Here is a look at some tips to get your personal loan sanctioned in an easy and convenient manner.

1. Apply online

In this day and age, you should take advantage of the internet and apply for personal loan online, rather than visiting the offices of the lender in person. This saves you a lot of time and the money that would have been spent on the conveyance from your residence to the lender’s office. Websites offer detailed information regarding a personal loan and the interest charged on the same. So, make sure that your do not waste your precious time by manually visiting the lender.

2. Compare the rates

When you apply for personal loan online, you also get the ability to compare the rates of interest charged by the different lending companies. Visit the sites of all major lenders and decide which one suits you the best. Some lenders may charge higher interest, but may also offer a longer duration for loan repayment, while others may charge lower interest but also allow a limited time frame for paying off the debt.

3. Personal loan EMI calculator

Calculating how much you would need to pay each month for a particular loan can be difficult to determine. Manually calculating the EMI payable for each of the loans from different lenders can prove to be difficult. This is why most of the websites are equipped with a handy tool, known as the personal loan EMI calculator. You need to feed the principal sum being lent, the rate of interest charged and the duration for the loan into the calculator. The tool will tell you the EMI that you would need to pay for such a loan.

4. Keep documents ready

For a personal loan application to be sanctioned, you need to keep certain documents at the ready. The lender may ask for these documents at any time to verify your credentials and determine whether you qualify for the loan. When you apply for personal loan, ensure that you have salary slips, identification papers and other relevant documents handy for verification.

If you follow the tips mentioned above, you can be sure that you will face the least amount of hassle before getting the loan sanctioned.

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What are the factors that can affect your application for a personal loan?

Living in a time in which unforeseen expenses ambush us at every turn, it becomes imperative to stay updated on personal loan services offered by numerous financial institutions. Whether it is a medical procedure, an upcoming wedding, a dream car to pay for; a personal loan can assist you in funding those expenses and sparing yourself of the overbearing frustrations that accompany all financial undertakings. Here are some of the factors that can have a bearing on your application for a personal loan.

Type of Employment

Though financial institutions do not determine personal loans on the basis of employment itself, they certainly require different documentation for the kind of job you might hold. If you are a salaried employee, you may be asked to present pay slips and employer information whereas a self-employed individual would be told to submit profit/loss statements and verification of their business operations. So before you apply for personal loan online, it is essential you are clear on your employment status.

Level of Income

Most financial establishments have a mandatory range of income on the basis of which they declare legibility for each personal loan application. They have to ascertain whether you will be able to pay regular payments with interest. Likewise, they also calculate interest rates through this method. They might also want to confirm with your employer as well as your financial institution whether you have prior debts and their relevant payment trends.

Size of the Loan

Most financial enterprises will have certain minimum and maximum limits on the loans they are willing to allot to each applicant. If the size of the personal loan you are requesting exceeds the predetermined limit, your application will face a greater hurdle to be accepted. So before you apply for personal loan, be sure to thoroughly research on plans that have the best options for your particular loan request and then apply for personal loan.

Financial institution Relations

Ultimately, your personal loan is not going to be processed by an automated system; it will be carefully analyzed by an experienced individual who is likely to deliberate over a number of considerations when contemplating your application. If you can build a good-natured relationship with the financial institution and its representatives, they will be more likely to understand the purpose for which you are requesting the personal loan. Their policies exist for individuals to acquire access to the most suitable loan plans as they are here to help you to the best of their abilities.

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Apply for personal loan: Enjoy a stress free loan application with these tips

A personal loan can be a very useful financial tool, which can help you get through expensive periods in your life, such as a marriage, foreign vacation or even medical emergencies. Applying for a personal loan has also become much easier these days, due to the emergence of the internet and the smartphones. Here are a few tips through which you can easily apply for personal loan without any hassle.

1. Go Online

Perhaps the most important tip for enjoying a stress free loan application is to go online. Do not waste your time visiting lenders physically, one at a time. This takes much longer and wastes your money on conveyance from one institution to the next. Instead, open your smartphone or computer and access the internet. Check for the loans and apply for personal loan online.

2. Compare rates

It is always a good idea to compare the interest rates charged by different institutions. This can be done quite easily online. Visit the sites of the lenders and read about the rate of interest and other details for the personal loans that they offer. Ensure that you visit the pages of all the major lenders in the market, to get the best idea regarding the best rates for you. This will not only reduce the stress while you apply for personal loan, but will also reduce your stress while repayment.

3. Use the Personal loan EMI calculator

Comparing rates is fine, but you also need to know the exact EMI amount for such a personal loan. While you apply for personal loan online, you can also take advantage of the EMI calculator for such a loan. This tool can be found online and will tell you how much the EMI would be once you enter the principal amount and the rate of interest, followed by the tenure of the repayment.

4. Keep necessary documents ready

To enjoy a smooth and stress-free loan application, ensure that you have all the necessary documents at the ready. These include identification papers, salary slips and others. Ensure that you have photocopies of the same prepared, so that at the time of application, you do not need to search for the same.

Keep these tips in mind, while applying for the personal loan and the entire procedure should be much simpler and smoother to handle.

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Precautions to consider when applying for a personal loan

A loan is a great financial assistance, when you require any funds on a short notice. When it comes to take a loan, you need to consider all the facts and features that will play an influential role.

This is no different for personal loans. Like any other loan, you need to keep in mind certain particulars when applying for this loan. After all, you will be borrowing funds from a financial institution, wherein which, at some point in time, you would be required to repay back.

At such a stage, you would not want to be in a position where you will be unable to repay back the funds you borrowed through the personal loan you applied for. Not only will it lead to additional financial burden, you also risk impacting your financial profile.

Therefore, one should consider some of these precautions before applying for personal loans:

Keep an eye on the credit rating

Credit rating or credit score is the measurement of how well an individual is regarding repayment of loans and credit card bills. So, if you are late in paying your credit card dues, it is possible that your credit score will not be high enough to get a loan. Similarly, if you have previously taken a loan, the bank will also check your track record in regard to repayment of the same.

In case your credit rating is substantially low, you can improve it by taking and repaying small loans. After improving the credit score, most banks will offer their typical annual percentage rate or APR. This is the lower rate of interest for a personal loan. However, if the credit rating is lower, the banks may charge higher rates.

Compare the rates of different banks

Due to the emergence of online banking, it has now become quite simple to look up the interest rates for a personal loan offered by individual banks. It is always advisable to check the rates of each bank to ensure that you find the scheme that suit your needs the best. Your bank may offer preferential APR to its current customers, but you may find lower interest rates at other banks, even though you are a newer customer there.

Check the charges levied for early repayment

At the time of application for the loan, many do not consider the prospect of early repayment, but it is nonetheless possible. Usually, banks charge a certain penalty if the loan applicant intends to repay the debt before the repayment period ends. So, it is important that you check with your bank just how much the early repayment charges will be.

Personal loans should be opt for in case of emergency

Personal loans offered by banks are marked up with the greatest rate of interest. Usually this loan should only be considered to repay a greater debt. For instance, you can take a personal loan to manage your increasing credit card bills. Such loans may also be taken to fund the education of your children or their marriage.

A personal loan is not a secured loan, which is why the rate of interest on this loan is high. Thus, one should carefully consider the loan before applying for it.

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Why financing emergency business requirements will work best with a personal loan

In today’s globalised world, an event taking place in a country can affect the economy of a nation located on the other side of the world. Thus a business, without any apparent wrongdoing, may experience hard times. This is where online personal loans can play a big role in alleviating some of the problems that a business establishment may find itself in. This type of loan is an unsecured loan as they do not require any collateral. Lenders generally look at the credit score of the person applying for the loan before deciding whether to grant the loan or not.

The benefits of applying for a personal loan online are:

·         Such a loan is the best way to meet your emergency business requirements. A business may require borrowing some money to meet the requirement of working capital, to purchase industrial equipment, to expand business units, upgrade the technology that it uses, to establish a new office and for other things. A business may require the money immediately and therefore cannot wait for the loan to get sanctioned by traditional lenders. In such a scenario, online personal loans are the best option.

·         It is extremely convenient to apply for a personal loan. It allows a person to apply for a loan from the comfort of his/her home by filling out an application form. You do not have to visit the office of your lender to get your loan approved as all dealings can be done online only.

·         It is easier to get a loan online than to get it from a bank. Online loan providers are ready to disburse personal loans by just checking the credit history of a prospective borrower. A person with no credit history is also eligible to get a personal loan from some online lenders.

·         Availing a personal loan online usually attracts lower interest rates when compared to personal loans from banks. This is because this industry is highly regulated and a portion of loan applications are often rejected. However, this does not detract from the fact that interest rates on personal loans are much higher than secured loans as no collateral is required to avail personal loans.

You can avail a personal loan at any time as online portals do not function like traditional lending institutions like banks. A person can apply for a personal loan in the dead of night or on a holiday if his/her business so requires. Furthermore, it saves a lot of time. Approval for a personal loan can happen within a few minutes when it is done online.