Try Applying for a higher Loan Amount as most bank reduce interest rates as loan amount increases
Try Adding the income of a co-applicant like a working spouse
Financebuddha can help you consolidate all your loans into one to increase your eligibility
Are you a self-employed or salaried individual trying to meet both ends? Have you given a thought about availing personal loans as an option? Whenever there is an unusual expense like child's marriage, renovation of your home or furnishing, children’s higher education, family holiday, or any other dream to be turned into reality, make use of the personal loan option. With this, you have the option to repay your borrowed amount gradually in the upcoming years, no guarantor or security is required, hassle free documentation process, our executives will come to you to collect necessary documents and if all requirements are met, money can be expected within few days. Embark on your dream at the right time with opportunities available!
Personal loans are the financial tools which are highly beneficial when it comes to the sudden and immediate need of money. A personal loan is unsecured in nature which means it doesn't need to be backed by any collateral or guarantor. It is a great source to maintain and manage your cash flow when you are facing cash crunches. The point which makes it even more convenient for the customers is its wide availability and multipurpose nature. These loans can be availed for multiple reasons which can be either personal or professional. From funding your child's higher education to your home renovation and from funding your start-up business to purchasing an upgraded gadget, a personal loan can be availed for any of these reasons.
It is essential to be aware of ‘what purposes a personal loan can be availed’. Without valid reasons, a loan will not be approved. For purposes like house renovation, education, maternity expenditure, vacation, automobile etc. personal loan is the best option. You can choose suitable interest rates and payment plan from the options available in the banks. The main two types of personal loans available in India are secured loans and unsecured loans. The first one is where there is a need for guarantee or security against the sum borrowed like a fixed or movable asset. In case of default of the loan amount, ownership of the security will be taken over by the bank. The latter does not require any security, but the lender will charge a high rate of interest on the money borrowed. In case of default, the lender will seek legal assistance for the loss incurred.
Personal loans are easily available in India, You just need to fulfil the eligibility criteria and need to have the documents required in place along with a good CIBIL Credit score. Banks and NBFCs are offering Personal loans which are totally unsecured loans, and the loan amount typically ranges from INR 50k to INR 40 Lakh with the top lenders.
Festive loans are generally short-term loan offered by lenders to take care of the festive expenses. This is generally a small amount of money borrowed to funds a festival. The borrowing limit of these loans is low. The tenure period for which this loan is offered is generally kept shorter. This kind of personal loan usually comes with a lower interest rate and the processing fee charged less comparatively.
Indian Weddings are a costly affair as most of the people want their wedding to be a grand one and that particular day to be the day to be a memorable one. Even a normal wedding in India comes with lots of expenses which include gifts, fancy clothes, jewellery, dinner, reception, decoration and so on. Fulfilling all such things from savings is not possible for everyone and hence a number of people come through shortage of money meanwhile. Wedding loans are opt-in such a situation. Wedding loan offers you money according to your requirement and helps you to make your special day memorable.
If you want to travel to your favourite location without draining your savings or without affecting your monthly budget, this personal loan can help you to do so. The interest rate is affordable and tenure is also short, all this will help you repay the loan easily without any hassle. The loan amount which can be borrowed depends both upon your creditworthiness and your travel destination.
Though there are many home loans schemes available in the market, personal loan as a home renovation loan are also in demand. People often don't go for a home loan instead of this loan is because they need collateral or guarantor against your borrowing and on the other hand it will be a long tenure loan. Don’t renovate their house as the cost is too high.
Education is becoming expensive day by day. And people go for the typical education loan when required but getting approved for an education loan is also difficult, this is because before approving the loan lenders always looks for the educational institution. If your institution is good they considered it as low risk. Hence those who are not eligible for a personal loan or who are in urgent requirement can go for a personal loan which will work as an education loan for them.
Consumer durable loans are offered by the banks to the customers to purchase consumer durable which can either a home appliance or a gadget such as a television, laptops, latest phones refrigerators and so on.100% finance is offered in such kind of loans.
A medical emergency can come to anyone and it may need lakhs to be spent to save the life of our near and dear ones. Medical costs are increasing and people do not have enough accumulated wealth to get medical treatment. Medical Expense loans are the one which can help you in time of medical emergency where immediate funds are needed. This personal loan is easily available and affordable too.
A low CIBIL score can mean that you have had a bad credit history. This means that either you have not availed any loan in the past. Or, it can mean that you have not paid your instalments on time. This means that banks and financial institutions will refrain from giving you a loan in future. A person with low CIBIL score must start to repay his loan. Also, the loan should be a mix of secured and unsecured loans. One with low CIBIL score can avail loan on the name of his wife or anyone close. You can also take loans against assets, (Gold or car). A benefit of availing a loan when you have low CIBIL score is that you can manage a loan when you need it urgently.
These loans benefit people who do not have fair chances of getting a loan normally.
There are some banks that still provide loan for people with low CIBIL score, like HDFC Bank, Tata Capital, Kotak Mahindra, Aditya Birla, etc.
As the name suggests, same day loans are the loans provided on urgent basis. These loans can help in cases of immediate or urgent needs like if you need to pay someone in emergency. These loans do not need guarantors. The response time for these loans is very less. These loans are also called payday loans. The benefit is that the documentation process is swift and easy.
These loans are availed by people who need money urgently.
HDFC Bank, Tata capital, Citibank, IndusInd are some of the banks that provide these loans.
The popularity of personal loan is rapidly increasing day by day and the reason behind this is the convenience and flexibility which it offers to the borrowers. Well, here are the benefits which a personal loan holds.
One of the biggest benefits which a personal loan offers is the convenience which it offers to its customers. Applicants have to fill the application form and provide all the required details. This facility is a great advantage for those who do not want to visit banks frequently.
A personal loan can be opted for multiple reasons. For example, one can use a personal loan to add cash inflow to their monthly budget, to bear the educational expense of their child, pay off your outstanding debts, home renovation or even to fund a vacation with your family. There is no limit on the utility of amount borrowed through a personal loan, this part comes as an advantage for the borrower as they can use it the way they want.
A personal loan takes less processing time which is followed with quick disbursal of the loan amount. This makes borrowers feel comfortable borrowing as the money is available to them within a short duration. Hence, if there is an immediate need of funds a personal loan is the one on which one can rely on.
As compared to the traditional brick-and-mortar institutions, personal loan have lower operating costs by nature along with no hidden charges. Apart from this the loan amount available through personal loan ranges from a small amount of ₹ 50,000 to a huge amount of ₹ 5,000,000. These significant features allow borrowers to borrow according to their requirement.
A personal loan needs a minimum of paperwork as such needed for a home loan or business loan. These categories of loans are very precise in nature and demand minimum paperwork which does not include any flaw in it. Generally, the documents needed for a personal loan are- Documents for ID proof, documents for address proof, Pan Card and Bank statement. The minimal documentation leads to less hassle during the processing of the personal loan and makes the entire process faster.
ICICI Bank is the second largest private bank in India. The bank provides banking and financing services to its customers. ICICI is known for its customer satisfaction and quick redressal. The bank provides personal loans at an affordable price which makes it more appealing to the customer. The eligibility criteria are sorted and the rates charged are genuine. It also provides attractive schemes at reasonable interest rates.
Getting personal loans from the premium bank- HDFC Bank is quick, competitive and very transparent. Use the flexible online Loan EMI Calculator and Finance Buddha to get to know the EMI you will have to pay for the amount you borrow. If you are looking for a bank that can give approval in just 5 minutes for a personal loan, then your search ends here. The loan can be availed up to ₹ 2,500,000 and for a tenure of 5 years. HDFC banking personal loan service is easy to avail it has the ability to meet all your financial needs in a happy manner.
13-24 Months: 4% of Principal Outstanding
25-36 Months: 3% of Principal Outstanding
>36 Months: 2% of Principal Outstanding
One of the best banks for a loan, it has good scrutiny and offers loan for genuine applicants. The first bank rated for pretty good service and offer great options to its customers. This bank offers fast service with less interest rate. It has very transparent and flexible in its eligibility criteria. It is possible to get personal with just 2 days from this bank if you have all the necessary documentation and if you meet all the criteria. It has fast approval processes with minimal and easy documentation. Easy processing and quick response.
Citibank Personal Loan services are considered one of the approachable and the most inexpensive ones existing in the market. This personal loan can be made use to meet financial requirements like medical expenses, education expenses, travel expenses, home renovation expenses, wedding costs or even for a vacation. Citibank offers personal loan at low-interest rates for any online applications. All relevant documentation requirements are nominal, and no collateral or guarantor is required. The top-up option is made available with all Citi Personal Loans according to your eligibility.
Whether it’s a financial need for an international holiday, a wedding a facelift of your home or the need for quick payment, a Personal Loan is the best option available. But the biggest question which always remains in mind is who is the best lender and how much time would it take to process the loan. Here is the Axis Bank Personal Loan which offers you the most flexible personal loans which would suit all your personal needs when you need it the most.
The personal loan lenders and the loan offers both are found in abundance in the present market. As personal loans are fast in disbursal and need no to minimal paperwork it is very easy to avail a personal loan. Though it is easy to apply and get approval on personal loans, it is not an easy task to find the best personal loan offer.
Comparing and choosing a best personal loan provider is always a tough task, it is essential to understand the way they work, banks interest rates, types of loans offered- secured, unsecured, fixed, and variable, overdraft and line of credit, go through the bank’s application checklist and look for Star ratings. There are a lot of online applications to compare what is offered by each bank, choose the top five, bring down your list to top 3 and then narrow it down further to the bank that offers the best personal loan.Here is how to find the best personal loan offer.
The interest rate is the first concern of most of us when it comes to choosing a personal loan offer. The total cost of a personal loan is determined by combining the interest rate and the length of the loan repayment period. So, in order to minimize the cost of borrowing, the loan should be of low-interest rate as well as the tenure should be short. The interest rate of personal loan differs from lender to lender. To find a low-interest rate personal loan, one must compare the loan offers of several lenders.
The next point to consider is the fee and charges you are to pay to the lender excluding the principal and the interest component. Some lenders may keep the fees like processing fee, documentation fee etc high while some others may keep it low to attract customers. In both cases, one has to be careful enough to dig deep into the matter and find out if the lender has any hidden charges. One should finalize any lender after evaluating all the fees and charges that has to be paid to the lender during the loan tenure.
The loan repayment period or the loan tenure should also be checked if you are trying to find the best loan offer. Loan tenure makes a great impact on the total outgo of the loan. Some lenders may offer you a very long loan tenure to make the EMI amount smaller. But remember the fact that, a longer tenure loan is costlier as the interest is calculated in a compounded way. So before you make any decision you can check online EMI calculator to determine how long it will take you to pay back the loan.
Along with all other concerns, one must be aware of the repayment flexibility of the lender. Personal loans are installment loans. Hence the ideal repayment of the loan should be done in EMIs till the tenure ends. But during the loan tenure, it may happen that you have some extra fund and you want to pay it towards the loan repayment to save the interest payment. In such scenarios, the lender should accept the prepayment of the loan. Some lenders may let you pay a prepayment penalty while some others may not allow you to do the same. So, before you apply for a personal loan be assured if the lender accepts prepayment of personal loans.
Though none of us apply for a personal loan with an intention to miss the EMIs, never to neglect the fact that the future is uncertain. Such situations may arise when you become unable to pay the loan EMIs. In such situations, one should never wait until the EMI bounces. The best practice during those times will be contacting your lender request for a consideration. Before you apply for a loan, you should be aware of the policies of the lender during such circumstances.
Personal Loan Balance Transfer is the process of transferring outstanding amount of an existing personal loan, from one financial institution to other, thereby closing the loan account in the former and starting a new loan account with the latter. Once the balance transfer is complete the customer will need to repay the personal loan as per the terms and conditions of the new lender, be it a bank, NBFC or a marketplace.
Balance Transfer facility is an attempt of banks to increase their personal loan portfolio by taking over another bank’s personal loan account, for which they offer better personal loan interest rates and repayment options to the customers who are already repaying their existing loan regularly on time. Balance Transfer works in favour of both the lender and the borrower, while the lender acquires one more customer, the customer gets better repayment options.
Opting for a personal loan balance transfer will help you reduce your interest rate, lower the EMIs, hence help you save on the interest that you would have paid towards your personal loan. Personal Loan Balance Transfer allows the reassessment of the existing debt, change and modify as per the requirement.
Some of the benefits that can be availed through Personal Loan Balance Transfer are:
Personal loans are the best option in times when there is an urgent cash requirement for the time being, but it is not going to last forever. There might be a chance that the offer available is at a very high interest rate, for a variety of reasons, but still that is the only way out. Once, after having availed the personal loan and utilizing it for the purpose intended, it is a big deal to carry on with the heavy monthly repayments, when you could have the same loan at much lower interest rate. And this is the most important driving factor of balance transfer. If there is an offer available at a lower interest rate, it is always advisable to opt for it.
In general, personal loan balance transfer should be availed when:
Documents required by all the financial institutions regarding balance transfer are:
Personal Loan Balance Transfer is a great option to reduce the burden of debt and increase the savings. Here are top points to consider before availing a personal loan balance transfer.
Here are few do and don’t to be kept in mind before applying for personal loans. It is essential you read this before taking a personal loan, work out how much you need exactly.
Managing your finances and your personal loan efficiently is a difficult thing. One of the most important thing we should keep in mind while applying for personal loan is you should be always sure that how much you need, don't borrow more than your need. After that the second important thing you need to do is to manage your personal loan efficiently. Here are some points which you should do to manage your personal loan effectively.
Personal loan is a loan for which you don't need to submit any documents showing the purpose for which you are taking the loan because of this personal loan can be used for wide range of things one of them is financing your Business with a personal loan. Here the question arises when it is right to Finance your business with personal loan. The answer is mentioned below for you.
But always keep in mind that you should go for it when your requirement is short term and onetime thing.
CIBIL score is numeric value which depends on your financial as well as credit history. It is very important as all the Banks and NBFCS check for this score as CIBIL score says everything about your repayments for your previous loan and your financial history. The CIBIL score ranges from 300 to 900 out of which score above 700 is considered as a good CIBIL. A good CIBIL score means you are having a good credit and financial history, you were paying the EMIs of your previous loan on time without any penalties. These factors assure a lender that the applicant is loan ready and will be on time with the personal loan repayments. None of the bank would be willing to lend to a person having low credit score as by doing that they will increase their own risk and if some bank lends to such a person they will definitely charge more interest rate to such people who are having low credit score.
At the same time if you are having a good CIBIL score then you can get a personal loan easily from your choice of bank at comparatively lower interest rates.
For having a good CIBIL score you should pay you EMIs timely. Your timely payments will always keep your CIBIL score more than 700 which will help you in future while taking other loan or any kind of personal loan.
Along with many other benefits, a personal loan can be a great way to improve the credit score of any individual. The credit score is a numerical data which represents the creditworthiness of a person. The credit score is determined by credit bureaus based on the credit history of any individual. The CIBIL (Credit Information Bureau India Limited) is India's first Credit Information Company of India. It collects and maintains records of an individual's credit behaviour. Financial institutions are supposed to report all the financial activities of any individuals to CIBIL and hence they maintain a record of it. Based on those pieces of information, it gives out a numerical score ranging from 300 to 900 to each individual. Higher the credit score, better the chances of getting approval on loans.
If you have a low credit score and the potentiality of getting a loan in near future is at risk than a personal loan can help you to boost it. Let's understand how a personal loan can be helpful in increasing your credit score.
Regular payment of EMI is an obvious and the simplest way to boost your credit score. Your EMI amount may be a smaller one or a huge amount, if you pay every EMI before the due date you will be proven as economically disciplined and will boost your credit score as well.
When you refinance a credit card loan with a personal loan in impacts positively in your credit score. Your credit score is supposed to increase when you consolidate your higher interest loans to a lower interest loan. Such financial activity will be considered as an economically concerned individual, hence the credit score will increase.
Most of the times we find that the individuals who have an appreciable credit score typically use a mixed bag of different types of credit, including both revolving and installment loans. If your credit reports show mostly credit cards but few installment loans than your credit score might be having a negative impact because the same. A personal loan is one of the types of installment loans that can be helpful in improving the credit score. Other types of installment loans can be home loans, auto loans, or student loans.
A high credit utilization ratio has a quite negative impact on your credit score. The credit utilization ratio is the ratio of how much do you currently owe to any lender, divided by the total credit available to you. For example, your credit card limit is INR10, 000, and typically carries a balance of INR 9,000 on your card so your utilization ratio would be 90%. So if you are using 50%, 75% or even 99% of your available credit monthly, your credit score is sure to get damaged. In such cases, a personal loan can be proven to be a boon. Additional credit in the form of personal loan can help you to lower the utilization ratio and boost your credit score.
Finance Buddha is not just a loan comparison site, but you can directly apply for a loan at the best bank of your choice. Here you just have to update your details such as Current Company, take home salary, existing EMI amount, Salary account bank, loan requirement and tenure, and it will auto-calculate the amount that should be paid per bank interest rates, its processing fees, etc. Once this information helps you to decide the bank you wish to avail loan, click on “Apply Now” and share your contact. After the successful submission of online application, our customer support will contact you directly to make your interest executed.
Along with the above information, keep in mind it is possible to negotiate on the personal loan interest with the details of your income, company status, credit rating, payment history and relationship with the bank. Make every effort to reduce the interest and enjoy the benefits to the fullest!
The first and the basic step towards your personal loan repayment begins with analysing and calculating the EMI towards your Personal loan. The very first thing one should do why opting a personal is analysing the requirement which includes how much exactly you need. The second thing which you should do is self-evaluating your capacity to repay the borrowed amount. One should be very clear about his/her capacity to repay the loan. The time period in which you can repay the borrowed amount without affecting much on your daily lifestyle. One can use the Personal Loan EMI Calculator to calculate the estimated EMI in advance. Doing this will provide an idea about your EMI before you borrow. Doing this will also help you to plan your finances accordingly and manage it in a more efficient way
It’s a personal loan repayment option where a borrower can increase the EMI of their loan with the increasing tenure period. Step-up repayment option is best suitable for those borrowers who are confident about an increase in their income in the near future. People working in private sectors get a good increment with the growing experience and job switch hence step-up repayment or step- up repayment is favourable for this group of people as there is a guaranteed increase in income in near future. Most importantly opting for a step-up repayment save a lot on interest. This is possible as when the EMI increases the loan ends soon which can save a lot on the payable EMI.
It’s a repayment option where a borrower can decrease the loan EMI with the increase in the tenure period of the loan. This option is suitable for those who want to end their loan soon and become stress-free about the repayments in the future. Individuals who are close to retirement can opt for this option as with the retirement income reduces. Hence, being in service is the best time to repay the major part of the loan when you are earning enough. This repayment option is also suitable for people who have a good source of income currently and are not sure about a certain income in the future.
Like a balloon, this repayment option allows the borrowers to pay lower EMIs in the initial years of your loan tenure. But this doesn't mean that balloon and step-up repayment are same, the difference to step up loans is that more than one-third of the loan amount is paid during the last installments of the tenure period.
Personal Loan top-ups are the loans which are offered to an existing personal loan borrower. These loans are offered by almost all the top personal loan providers. Interest rate of a top-up personal loan is the same that of a personal loan and can be availed without much hassle as the lender already having the borrowers details. A top-up personal loan can be used for multiple purposes which includes personal needs such as financing your daughter's marriage, financing your higher education, repaying previous outstanding debts and so on.
You can now get instant online loans with Finance Buddha. This online personal loan is a completely online hence paperless. This is not only about saving paper but its best part is reduction in the processing time. The documentation process is online, i.e. the applicant has to upload all the required documents online on the portal itself. This is the simple, quick and effective process which is best suitable in emergency situation because in any kind of emergency every second matters. Online personal loans are unsecured loans in which nothing is required as guarantee or guarantor like any kind of property or any person. Because of this reason only its interest rate is high as compared to the other loans. This online personal loan can be availed in any kind of any emergency. Finance Buddha's team strives hard to deliver personal loans within 24 hours. It is the quickest, effective and simple process for both the lender and borrower.
The additional features which we are providing in the online personal loans are:-
To see more details and to apply online, visit - Insta Loan
In order to avail the benefits of paperless loan, all you need to do is fill the loan application which is available on the Finance Buddha website. Your application will be processed instantly. If you have any doubt then first go through the information mentioned on the website. The page will show you the best loan offer you are eligible for, and other information regarding your loan. If you choose to apply, upload all the required documents as per mentioned and proceed. As soon as you are done with this is, you will get a confirmation Call for the verification of all your details and to understand your loan requirement in detail. If everything goes fine, sign the Loan Agreement. As soon as the signed agreement is received, your loan amount will get disbursed in your account within 24 hours.
For applying for the online personal loans just follow these simple steps:-
Here on your part of work is done and now it's turn of Finance Buddha to process and favour your loan application. If all information and the documents given by you are correct then your loan application will be approved within 4 hours and the loan disbursal will be within 24 hours. It is the best Loan which can help you in any emergency. There are some emergency situations in which online personal loan (Insta loan) can be helpful, those conditions are:-
Personal Loan is a product which is available with all the banks and because of less documentation and fast disbursement it has gained significant popularity too. But when it comes to visiting multiple banks to collect all the information and then apply, you might get confused and take a wrong decision because of all the hassles involved. So before applying with any FI, go through the following points.
The reasons you should choose Finance Buddha for Personal Loan are as follows:-
Personal Loans are a very fast and efficient method of getting the required fund in the time of need. And why not, compared to all other loans, personal loans require minimal documentation and are processed faster. The process of personal loan starts as soon as you apply for it. Let us have a look at the steps involved, so that you can get an understanding of the entire process of personal application process at Finance Buddha, right from applying to the time the amount is disbursed into your account.
The advantage that you get when you apply with Finance Buddha is that you just need to apply online. Everything else thereon is carried out by our team and you have the loan amount disbursed to your account without any hassles of running around and visiting any offices be it ours or the lender’s. You just apply online and let Finance Buddha take care of everything else until the loan amount gets disbursed to your account.
A personal loan is a great help in case of any urgent financial need. However, a personal loan is an unsecured financial tool which generally comes with a high rate of interest. Due to its high-interest rate repaying it for a long tenure can cost you much, hence it should be the top priority of a personal loan borrower to close the loan in less time else it can increase your financial and debt burden.
Closing a personal loan not only reduces your financial burden but also provides you mental peace and stress- free life. You become free from one of your major responsibility to pay the monthly EMIs. Closing a personal loan can add more cash to your monthly budget, one can start savings or investing as well as soon as the personal loan burden is over.
One can either regularly repay the loan close a personal loan by repaying it till the completion of the entire tenure or one can pre-close the loan to reduce your debt burden.
The first and the most important thing which you need to close a personal loan is your Personal loan account number. This can be found easily on the loan account statement. One can also get it by using the online banking facility or through the NetBanking account if available.
ID proof is a must thing required to close a personal loan. One can use PAN card, Aadhaar card, Voter Id card or any other government-issued identity document to show it as an identity proof.
Other loan-related documents include a loan approval letter, loan account statement and other documents issued by the lender.
In regular closure of a personal loan, a personal loan borrower makes regular payments and pays off the loan in the same tenure period as mentioned in the loan agreement.
There are no charges imposed with a regular closure of a personal loan. You just need to pay the installments.
Step 1: Speak to your lender (bank/ NBFC) and inform them about the closure of your loan. This is needed to be done once you pay the last installment of your loan.
Step 2: Carry the required documents with you. The documents for ID proof, a cheque with the final payment (if any), and the loan account number and any other loan-related documents issued at the time of loan approval. All these are required as the bank will verify the documents before further proceeding for the closure of your personal loan.
Step 3: Get a NOC (No Objection Certificate). A NOC will be issued by your lender against the borrower after the procedure is completed. This certificate state that the borrower has repaid the complete loan and does not have any dues.
A loan is said to be pre-closed when you repay the loan before the loan tenure ends or when you repay the loan in a shorter time which is mentioned on the loan agreement. A pre-closer of a personal loan can save a lot on interest costs when done on right time. However, different banks have different lock-in periods before which you cannot close the loan. Moreover, there are certain charges imposed by certain banks on the pre-closure of a personal loan known as pre-closure charges.
It totally depends on the banks' policies that where they will charge for a pre-closure or not. Generally, the charges vary from bank to bank and it depends on the outstanding amount too.
Your personal loan account will close once the money is received by the bank. And shortly the bank will dispatch the loan closing papers to you.
Prepayments and part payments are always considered good for personal loans. In prepayment you pay the outstanding amount of your loan to the lender before the due date and close your loan before the fixed tenure period. This can be done in two ways. Either you pay the entire outstanding amount in one shot or you can pay the same in equal lump sum parts, instead of paying in EMIs. But it is important to check before taking loan from the lender that whether that lender allows prepayments and part payments or not because if you are planning to do so it is important for you to know all the terms and conditions before going for it. Many banks charge some amount as a pre closure charge for pre closing your loan.
Some of the advantage of pre and part payments are:
Personal loans are the best instruments to meet your financial requirements or to overcome the financial crunch. These are the unsecured loans and they are the ideal instruments when you don’t have security or property to pledge for loan amount. Usually, most of the times, personal loans are not taxable. You can even claim the income tax benefits over personal loans, if you have used the loan amount to construct, reconstruct, repair or acquire a property. The interest charged for the personal loans can be higher being an unsecured loan. It is easy for the salaried people to apply and avail the benefits of the personal loan. The self-employed, entrepreneurs or business-men can provide the income proof with respect to their business in order to avail the loan.
Loans are not being considered as the part of your income, thus the personal loan will not be considered as taxable when you file the income tax returns. Hence, this simply means that you will not have to pay any kind of tax on the personal loans. But, at the same time, it is essential that the personal loan should be from the reliable sources such as Banks, Non-Banking Financial Companies or financial institutions or financial lenders etc. The loan availed from the unknown sources will fall under the category of income and that will be taxable.
You can claim the tax benefits on the personal loan in certain cases. If you can prove that the loan amount has been used for the valid expense (Regardless of the source of loan), then you can use such personal loans for the purpose of tax savings. You can even claim the tax deduction on the paid interest of the loan. There are many lenders available in the market, that are authentic and they provide easy process to follow for the personal loan along with instant approval features.
If you have availed the personal loan for your house, then the proper arrangement for the same can create the wonders in terms of tax deductions. According to Income tax act, section 24(b), the same provides the great relief to the house buyers and provide them tax deductions on the loans, if they have taken a loan to buy a residential property or for the renovation of such properties. If you have used personal loan amount for the down payment to buy a house, then you can opt for tax exemption. At the same time, if the amount is used for renovation, home repairs or reconstruction, then all these expenses will fall under valid expenses for the tax deduction purpose.
If you have availed the personal loan for the education purpose, it also can be helpful while calculating the income tax. You can avail the tax deduction on the interest paid by you. Here, the important thing is that this benefit can be availed by you if you have availed the personal loan for your education purpose. If the same has been availed for your child or partner’s education, then you will not be able to take the advantages for the same. Now a day, people chose to avail the personal loans for the business purpose as well because the same is easily available. One can get a quick disbursal of the loan amount once the steps to avail the loans are properly taken. But, one should not forget that, here the interest that will be paid, will be considered as a business expense. Hence, the same shall result in the lower taxable income.
In order to claim the tax deduction, you will need all the documents as a proof that the loan amount has been used for the house. You need to preserve all the bills related to repairs, reconstructions, repairs, labours etc. to claim the tax deductions. If personal loans are used in the appropriate manner, it can become your tax saving tools just like it is the tool to meet your urgent, unexpected financial needs. However, one needs to know how to use the same properly.
Quick approval, collateral-free nature, no restriction on end-use of the money along with many offers including the pre-approved one, personal loans are extremely helpful in your financial tough time. However, apart from the several benefits personal loans has tax benefits too associated with it which many of us do not know.
The loan amount borrowed through a personal loan is not considered as a part of your income when you’re filing your income tax returns. Hence, the amount you get from a personal loan is not taxable. This clearly implies that you won’t need to pay any income tax on a personal loan. However, it is an important thing to be noted that a personal loan has to be availed from a valid and authorized source such as a bank or another financial institution. A personal loan from unknown and unauthorized sources might be considered as part of your income.
Yes! Personal loans do come with tax benefits, but it totally depends on the end use of the borrowed amount.
The Indian Income Tax Act allows tax deductions on personal loans for specific purposes, such as education, purchase or renovation of your house and business expansion.
When the money borrowed through a personal loan is invested in a business, the interest paid towards the repayment of the personal loan can be claimed for the tax deduction.
When the money borrowed through a personal loan is used to purchase, construct or renovate a house or property the interest paid for the same against the loan can be claimed for tax taxable. This deduction is possible under section 24. The maximum amount which can be claimed for deduction under this ₹2, 00,000.
In case one use the loan amount for buying an asset, one does not become eligible to claim a tax deduction immediately but at the time of sale of that asset. If one has used the personal loan to buy assets such as- property, jewellery, shares, bonds etc., the interest paid on loan will sum up as the cost of acquisition of that particular asset. The amount for tax deducted will be added to the cost of acquisition of the asset. And it will be available at the time you sell that asset.
Personal Loan application being rejected can increase your woes, especially when your requirement is urgent. And to make it worse, most of the financial institutions don’t even disclose the reason(s) for the rejection. Once the loan application is rejected, it is common practice to apply with another lender in the hope of getting approved. It is highly advisable to analyse and understand first, why was your loan application and then work on improving your chances of getting approved.
Personal loan application can be declined for multiple reasons depending on the different eligibility criteria each institution has. Each and every lender will look for certain factors like age, income, debt to income ratio, credit rating, employer and job stability. The applicant needs to satisfy each and every criterion that lender is looking for, to appear as a creditworthy borrower and get approved for the loan. However, there can be some relaxation in some criteria, if the applicant seems worthy, but approval/disapproval is at the discretion of the loan officer and cannot be argued.
Here are some of the factors because of which a personal loan application can get rejected.
As we know personal loans are unsecured loans and hence no guarantor or collateral is required. In case if borrower do not repay his/her personal loan the bank can’t recover the outstanding amount from the guarantor as they don’t have this option. The action which can be taken in this situation varies from lender to lender which they have already mentioned on the loan agreement. Some lenders can take legal actions while some will give a chance to settle it by paying amount which would be more than the outstanding principal amount and less than the total outstanding amount including the interest rate.
One of the fact is, the credibility of the borrower will definitely reduce if he/she don’t pay the EMIs which will make their future lending difficult. As any lender before lending will surely check for the CIBIL score and as the applicant was defaulting with the personal loan EMIs it has reduced a lot.
Tough time can come in anybody’s life and financial cash crunch may happen. During this time it becomes difficult to repay the personal loan. In this case a borrower has two options-
Settling of a loan is also known as loan settlement, credit settlement or debt negotiation. This is done when the borrower is not able to repay the loan to the lender. This process is to reduce the debt so that it could be easy for the borrower to repay the outstanding amount. In this the borrower has to pay more than the outstanding principal amount and less than the outstanding amount including the interest. This makes the repaying somewhat easier for the borrower.
For the process of debt settlement the borrower at first had to negotiate and convince the lender to reduce the total outstanding payable amount. Debt settlement is only possible when the lender grants the permission and gets ready to accept a particular amount which is less than the total payable outstanding amount.
In most of the cases Debt settlement is done in case of unsecured loan and the reason behind this is they don't have any option to recover from the guarantor or recover the outstanding amount by selling the collateral (mortgage) property. Hence the only thing they can do is do a settlement or take some legal action.
If the borrower have co-signers with them for the personal loan then that co-signer is equally responsible for the repayments and everything regarding that very particular loan. But when it comes to transfer of personal loan to someone else it is not possible in any condition.
When there is a gap between the disbursal of the first instalment of a loan and from when the borrower starts paying the EMI. The interest imposed by the lenders for this particular time period is known as broken period interest.
Private loans are the loans taken from family, friends and local money lenders. They are not taken from any authorized money lender like banks and NBFCs.
The P2P (peer to peer) lending is a technology-enabled mechanism which enables a person to borrow from another person without any use of an official financial institution as an intermediary. In this system of P2P lending, lending and borrowing are done between two individuals removing the middleman (bank/NBFC) from the process. The P2P lending is done via a platform where an exchange of money is done between the people who need money in the form of a loan and people who are willing to invest money.
The P2P lending is a form of crowdfunding. The people with excess fund invests their money in P2P platforms for gaining better interest than investing in other investment instruments. The investors across the country can borrow or lend through P2P platforms. The repayment of Peer to peer lending is done through EMIs just like any other personal loan.
Traditionally, the need for an extra fund for personal use is be fulfilled by availing personal loans through banks. To process your personal loan, banks have to go through a quite lengthy procedure. A banks personal loan procedure includes, checking credit score, verify documents, checking FOIR etc. The loan application is checked in different parameters which led to a great number of rejected loan applications. A peer to peer lending is a great alternative to get the desired loan amount while skipping all those hassles of banks personal loan.
A peer to peer lending happens when borrowers take loans from the individuals who are ready to lend their money at an agreed interest rate. The peer to peer platforms display the loan aspirant’s profile which can be accessed or checked by the investors. The investors access the profile of the loan seekers and determine the risk profile. The P2P lending is a collateral free loan hence the risk assessment is always the first priority of the investor. In a P2P lending system, a borrower may get the full amount or a portion of the amount applied for. In such scenarios, the rest of the amount may be provided by another investor. In this way, a borrower may have multiple loan sources hence the repayment of the same has to be made to each of the individual sources.
The P2P loan application is much easier than applying for any other kind of loans. One just needs to put in a few pieces of personal information and the loan application can be approved within minutes. The application of a P2P loan is done online.
The second benefit is the competitive interest rate. If you are earning well and have no records of defaulting loans, you are likely to get a loan cheaper than a bank loan.
Unlike a banks personal loan, the processing fee of P2P personal loan is considerably low. Apart from interest charges, traditional banks charge a number of fees such as processing fee, documentation fee, stamp duty charges etc. If you apply for a peer to peer personal loan, you can be saved from paying all those charges.
The Payment Protection Insurance, also known as PPI is a kind of insurance plan designed to cover any kind of loan. The PPI can cover different kinds of credits such as personal loan, mortgage, credit card payments etc. This type of insurance covers the loan EMIs in case of death or disability of the borrower to pay off the EMIs. In case of job loss or such situations when you are not earning enough to pay the EMIs, you can claim the insurer to pay the EMIs until you are earning again.
Generally, the PPI is sold along with the credit product by the lender or the partner companies of your lender. Lenders generally advise you to buy a PPI as it minimizes the risk of NPA to a great extent. The PPI policies have to be purchased separately for every credit you owe. Let's say, you have purchased a PPI for your home loan. If you become unable to earn enough to pay off your loans, the insurer will pay EMIs of the home loan only. If you have any other loan such as a personal loan or credit card due, the insurance will not cover those loans.
The PPI policies are to be purchased if your loan amount is huge. Bigger loan amount leads to hefty EMI amount. If you are not certain about the regular payment of the EMIs, it is advisable to buy a payment protection insurance
Secondly, if your source of income is not stable, you should definitely opt for payment protection insurance. So if your income becomes less than normal, the insurance will cover the EMI payments.
If your job associated with risk on life, you should better have PPI for you all kinds of loans including personal loans. The individuals servicing risky jobs such as fighter pilot, fireman, construction foreman, private detective and so on should purchase payment protection insurance plans to make the credits payments secure.
You should not neglect to buy a payment protection insurance if you are the only breadwinner of your family. If there is no other earning member in the family, you should go for PPI to safeguard your family from uncertainties of future.
Though personal loan is one of the most popular loan product in the market, people are still not very clear about it and there are a number of myths regarding the personal loan.
Many people believe that personal loans take a long time process and approve a loan application. But this isn’t true anyway. Personal loans are the quickest loan available in the market, which even comes with the pre-approved facility and with minimal documentation. The processing of this loan is online hence it is quicker than other loans. With some of the lenders, it takes only a few hours to disburse a personal loan.
CIBIL is one of the most eligibility criteria which is common among all the lenders. It represents your financial history, your borrowings and your repayments made. Regarding a personal loan also CIBIL is always considered and it’s an evaluating factor. But it is a myth that a personal loan application with low CIBIL always gets rejected. A personal loan application with low CIBIL may get approved when your income and repayment capacity is high. As income and repayment capacity are also important eligibility deciding factors.
It's a misconception among the people that a personal loan always comes with a high-interest rate. It is true that the interest rate of a personal loan starts from 10.50% per annum and can go up to 22 or 24% per annum. But when an applicant has a good income, high repayment capacity and a good CIBIL Score then a personal loan can be approved at the minimum interest rate possible.
It is also a Myth that personal loan does not offers prepayment option. A personal loan does come with pre-payment option, one just needs to check for this option while selecting his/her lender for a personal loan.
It is totally a misconception among the people that a personal loan is offered only by banks. People think so because a personal loan is an unsecured loan and due to the risk factor involved to the lender people think it is only the bank who can bear this risk. Whereas the truth is it is not only the banks who offer a personal loan, it is the NBFCs and many DSA as well who are into the business of offering personal loans.
It is totally a myth that there is no tax benefit possible on a personal loan. Tax benefits can be easily availed on a personal loan when one plans it properly.
You can use any of the following to pay your EMI a. Standing Instructions: Automatic Debit from your Axis bank accounts. b. Post dated Cheques c. Electronic Clearing system: Automatic Debit at the end of monthly cycle from your bank accounts other than Axis Bank.
Not necessarily only if you continue to pay the EMI`s on time. Kindly update your loan manager about any such change so that the manager can manage your loan better.
Not necessarily only if you continue to pay the EMI`s on time. Kindly update your loan manager about any such change so that the manager can manage your loan better.
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