Complete guide to avail personal loan

complete-guide

Wise men often said that money can’t buy happiness. While the saying remains true even today, most people will surely agree that money may not buy the happiness but the cash flow surely facilitates the happiness. There are times when people need money for personal reasons. These reasons could vary from an emergency in the family to the sudden death of a loved one or even an upcoming celebration that you want to host. Most of the times such occasions are unplanned and so people are most likely to face a financial crunch. Given this situation, the personal loan comes in very handy. As the name suggests, personal loan is when a bank lends you the money to finance occasions that are related to your personal happiness.

Reasons to get personal loan

Personal loan reasons

Personal loans are not cheap anymore, but nowadays it is easy to get with a lot of banks competing against each other to provide personal loans. People take a personal for different reasons, including personal loan for education purpose, personal loan for home renovation, personal loan for medical emergency, personal loan for vacation/holiday, personal loan for marriage purpose and personal loan for child education.

 
  • Personal loan for education purpose
    Parents go for a personal loan to cater to the needs of their child’s college education or to join their son/daughter in a computer course.
  • Personal loan for home renovation
    Your home is your best investment and why not add value to your home by getting a personal loan and add the needed improvements to your home.
  • Personal loan for medical emergency
    Personal loans are the major saviour during the times of medical emergency, as many insurances don’t cover all kinds of illness including dental problems and all.
  • Personal loan for vacation/holiday
    Vacations are most needed at least once in a year in this hectic lifestyle and personal loans comes to your rescue.

List of Personal loan providing banks

Nowadays personal loan is offered by various banks, compare one bank with another bank and choose the one that suits you. Before applying personal loan check the offers available in all the banks.

Personal loan banks

Bank Rate of interest Processing Fee Pre-closure Charges Apply online
HDFC Bank 11.49% – 20% 2.50% 2% – 4% Apply now
Axis Bank 15.50% to 24% 1.50% to 2.00% Nil Apply now
ICICI Bank 11.49% to 22.00% 2.50% 5% Apply now
Citi Bank 13.5% to 20% 2.50% 3% Apply now
Standard Chartered Bank 11.99% – 15.50% 0.50% to 1.00% Nil Apply now
Indusind Bank 11.25% – 26% 2.5% 4% Apply now
Kotak Bank 11.5% to 24% 2% 5% Apply now
State Bank of India (SBI) 12.60% – 15.10% 2% – 3% Nil Apply now
Yes Bank 12.60% – 15.10% 2% Nil Apply now

Personal loan from Non Banking Financials(NBFC)

Non banking financials

Personal loans from Non-Banking Financial companies (NBFC) are simple, easy and a quick process when compared to getting a personal loan from authorised banks. The reason that personal loan from private finance is easy because, say for example, if you want to purchase an LED TV, you can walk into an electronics store and choose the TV that suits you best and the store has links with some private financiers in Bangalore, and your loan would be approved on the spot and you could easily walk away with the LED TV you’ve chosen for.
But if you go for a personal loan from a bank, you would definitely need to wait for at least 3-4 days to get the approval for your loan. Hence personal loan from private bank is easy to avail but the only thing is that the interest rates are normally higher than the public sector banks.

NBFC Name Rate of interest Processing Fee Pre-closure Charges Apply online
Bajaj Finserv 11.49% onwards 2.25% – 3% 4% Apply now
HDB Finance 18% to 33% 3% 2% – 4% Apply now
Fullerton India 21% – 32% 2% 0% to 4% Apply now
Capital First 16.00% – 24.00% 1.99% Not allowed Apply now
Tata Capital 13.99% to 17.50% 0.5% to 2.25% 2% Apply now
Indusind Bank 11.25% – 26% 2.5% 4% Apply now
Kotak Bank 11.5% to 24% 2% 5% Apply now

Peer to Peer(P2P) personal loan Lending

Peer to Peer Lending

Peer to Peer personal loan is the process of providing loans to individuals through online services that link both the lenders and the borrowers directly. Private loan lenders in Bangalore are in great demand for individuals who got their loan applications rejected in banks due to bad credit scores. Money lenders in Bangalore without security treat the peer to peer lending as a viable investment opportunity as it gives them high returns by means of higher interest rates.

 

The online services verify the borrowers so that there is no risk involved for private personal loan lenders without credit checks. These private money lenders in Bangalore unsecured provide personal loans without any security to businessmen, and one can get secured loans also by way of pledging assets, vintage cars and jewellery, etc. Private lenders for bad credit and p2p personal loan lenders are preferred by non-salaried and business people who cannot meet all the procedural requirements of the banks.

P2P Lender Rate of interest Processing Fee Pre-closure Charges Apply online
i2i Funding.com 12% – 30% 1.5% – 6% Nil Apply now
Lendbox 16% to 28% 2% to 6% Nil Apply now
Loan Meet 12% to 30% 2.50% 1000/- INR Apply now
Faircent 12% to 36% Varies Nil Apply now

Personal Loan rate of interest

Bank Rate of interest
HDFC Bank 11.49% – 20%
Axis Bank 15.50% to 24%
ICICI Bank 11.49% to 22.00%
Citi Bank 13.5% to 20%
Standard Chartered Bank 11.99% – 15.50%
Indusind Bank 11.25% – 26%
Kotak Bank 11.5% to 24%

It is quite essential to confirm about the rate of interest before taking the personal loan. You should always go for the personal loan with lowest rate of interest. Always make sure that rate of interest is of your caliber or not to avoid and odd situation further during repaying the loan amount. This is why loan with lowest rate of interest would be beneficial for you. Now the question is that which one is better between flat rate of interest and reduced interest rate personal loans.

Flat rate of interest

In flat rate interest method the interest is charged on the complete original amount completely during the loan period. For instance you took the loan of Rs.10000 and the flat rate of interest is 4% per month with payment period of 4 months. In the first month the amount of interest would be Rs. 400 and this amount would be the same i.e. Rs. 400 throughout the loan period. This method puts additional burden on the people who are willing to take the personal loan. This method enhances the amount to pay as personal loan interest rate rather than the declining balance interest rate.

Reduced interest rate

This method is more beneficial for the people who are about to take a personal loan or have taken it already. In this method you just need to pay on the remaining balance, and not on the principal amount. This method should be used because it allows the borrowers to pay for such amount which is left with them.Reduced interest rate method is more precise than the flat rate of interest method. Borrowers can compare the rates easily if all the institutions use the same method for calculation. People would like the application reduced rate of interest method by all means. Because everyone wish to pay the right amount as personal loan interest rate and reduced rate of interest method would definitely get fit for the purpose.

Eligibility to apply personal loan

If you are planning to take the personal loan then you should aware about personal loan eligibility criteria. Different banks have different criteria for giving personal loan. For checking that you are eligible or not you can visit the official websites of banks to check your personal loan eligibility. Most of the banks have the personal loan eligibility calculator to make your work easy. If you have desperate need of money then you can take a personal loan. But you have to satisfy the bank that you completely fit in their personal loan eligibility criteria.

Age limit Min 21 years – Max 60 years
Employment Type Salaried/ Self-employed professionals/ non-professionals
Employment Status Employed/In-business for at least 2 years, at least 1 yearr with current employer/business
Minimum Income Minimum 15k net income per month
Loan Amount Minimum 50,000 – Max 50 lacs

Required documents to apply personal loan

Below mentioned documents are required to apply personal loan for Salaried and Self Employed.

For Salaried Employees For Self Employeed
Identity proof Identity proof
Current residence Proof/permanent address proof IT Returns CA certified copies for 2 years complete set
Salary Slips for 3 months Business Continuity/existence proof 3 years old
6 months Bank statements Education proof
Appointment letter and proof of work experience Partnership Deed & other mandatory documents
Photograph and PAN Card xerox Balance Sheets

How to apply personal loan online?

Apply personal loan online

With the availability of options to apply for personal loan online, now you don’t need to run around banks to get a personal loan. Banks compete against each other to provide the lowest interest rates and also provide special offers for people who apply for personal loan through the online process.

There are many advantages to apply for personal loan online as you can check your eligibility of the loan you can avail instantly and with some sites, you can check the eligibility levels with different banks by simply providing your personal details, salary information and your company details etc. Along with the eligibility levels you can also instantly calculate the EMI amount for each month. Also, you can view the status of your loan application online.

It is definitely a game changer for apply for personal loan as it is easy, quick and simple for thinking of how to get personal loan from bank.

Personal Loan EMI calculator

Personal Loan EMI calculator

Equated Monthly Installments (EMIs) are the monthly payments that have to be paid in order to pay off the personal loans. The EMIs consist of part of the principal amount to be repaid as well as well as the interest on loan. The interest paid for each installment is higher initially and it reduces with each payment.

The EMIs can be calculated by a simple EMI formula but calculating the EMIs for different combinations can be complex and error prone. The EMI calculator calculates the EMIs in seconds along with visual charts displaying the total breakup of payment.

One can check your personal loan EMI by using this EMI Calculator

Reasons to reject personal loan

When you apply for a personal loan, banks have several criteria to ascertain your ability to repay the loan which includes your age, income, company, your CIBIL score and your credit score. There could be various reasons why bank loans are rejected which include:

Reasons to reject personal loan

Address in Defaulters List
There are cases where you have moved into a new house and the previous owner could be in the defaulters list and when you apply for a loan with the same address, your loan could be rejected without further verifications.

Bad CIBIL score
Minimum CIBIL score to avail personal loan is 750. Anything below this score is difficult to avail personal loan from reputed banks. This is one of the reason for personal loan rejection.

Poor Credit Score
If you have a track record of accumulating credit card dues for a long time and irregular loan repayments, then your credit score will come down to a greater extent and if your credit score is less than the prescribed level allowed by the banks, then it is a major reason for personal loan rejection.

Other Reasons
Some of the other reasons why bank loans are rejected are job instability, previous loan rejections, existing loans or low income levels etc.

What is CIBIL score?

Cibil score

The credit information bureau India limited is the first credit information company in India and it was founded in the August of 2000. CIBIL helps in collecting and maintaining all the records of a particular individual’s payments that pertain to the credit cards and loans. All these records are submitted to CIBIL by various credit institutions and banks and this is done on a monthly basis. The information acquired is later used to create various credit information reports or CIR in order to approve all the loan applications.

CIBIL plays a very important role in the financial system of India and this is the main aim for its formation. In simple terms it helps the customers acquire credit by quicker and simpler ways and also helps the loan providers to manage their businesses effectively.

An individual who has got a credit score that is above 750 has a much better bargaining power with the lenders as he will be perceived as a very responsible borrower. The consumers will just have to pay a cost of Rs. 470 in order to gain access to their CIBIL score. Thus they can see for themselves how they will be perceived by their prospective lenders.

What is Credit score?

Credit score in personal loan

A credit score is a 3 digit number created on the basis of information in your credit report. This score also determines the rate of interest you are charged.

It would definitely become beneficial for you to know what a good credit score is. It is considered as good when it is 720 or above. Different banks have different standards to determine it. So it is essential for you to know about what your credit score is, so that you may get the personal loan at appealing rate of interest.

You can sense at your own the importance of credit score. Higher the rate higher would be chances of getting the loan. You can easily get your personal loan with decent score.

How to get personal loan with a bad credit

Bad credit is not exactly a good thing. It can make you struggle to acquire a personal loan and you will have to put a lot of effort in the process. However it is not completely impossible to do so. There are a few ways or techniques which you can adopt to still acquire a personal loan. Personal loan for bad credit is available through a variety of ways which will be explained to you here. A bad credit means that you have a bad credit score because of your inconsistent history with your creditors and you are blacklisted.

Some ways by which you can still acquire a loan is to contact peer to peer lending institutions, check with Credit Unions, if you have home equity use this, contact your friends or family members and also appeal to a co-signer.

Pre-approved personal loan

People holding credit cards have experienced occasional calls from the bank executives that a pre approved personal loan has been approved. These are some new techniques followed by the banks to push for the personal loans. But these pre approved personal loan is not offered to everyone holding a credit card, but only to persons who have a clean track record of paying their dues on time.

Pre approved personal loan

What is pre-approved personal loan?
These pre approved loans are easy to avail as the credit checks have been already done by the banks and once you submit your documents, you can get the personal loan within 2-3 days. Even though these are some strategies adopted by banks to push the personal loans to reach their target levels, the customer is also benefited as he can bargain for lower interest rates and he can get a personal loan in quick time.

One can avail these type of loans from all banks including pre approved personal loan from hdfc bank, pre approved personal loan from Axis bank, pre approved personal loan from ICICI bank, pre approved personal loan from Citi bank, pre approved personal loan from standard chartered bank, pre approved personal loan from Kotak bank.

Balance transfer from other banks

Personal Loan Balance Transfer

Balance transfer is the process of transferring your outstanding credit balances from one credit card to another credit card from a different bank to avail lower interest rates. Many banks provide personal loan balance transfer offers with lower interest rates in order to get new customers.

Many banks also provide facilities like personal loan balance transfer calculator to check for the loan balance after getting transferred from one bank to another bank. Nowadays you have many options for personal loan balance transfer offers including personal loan balance transfer to hdfc bank, personal loan balance transfer to icici bank, personal loan balance transfer to citi bank and personal loan balance transfer to axis bank.

Not only credit card dues, you can also transfer your home loans, personal loans from one bank to another if you find the interest rates are lower in the other banks. You can also get a higher loan amount in the other bank, which could be an added benefit.

Personal Loan Customer care numbers

Personal loan customer care numbers are very important to communicate with the banks to resolve any queries. It is very difficult to remember all the customer care numbers. We tried to collect some of the banks customer care numbers. If anyone facing any issues with the banks while taking personal loan, please check the below personal loan customer care numbers in Bangalore city.

Bank Name Product City Customer care number
HDFC Bank Personal Loan Bangalore 080 61606161
Citi Bank Personal Loan Bangalore 080 22272484
Axis Bank Personal Loan Bangalore 1800-233-5577 / 1800-209-5577 / 1800-103-5577
ICICI Bank Personal Loan Bangalore 8088667777
Standard Chartered Bank Personal Loan Bangalore 6601 4444 / 3940 4444
Indus Ind Bank Personal Loan Bangalore 1860 500 5004 / 022 44066666
Kotak Bank Personal Loan Bangalore 1800 102 6022
Bajaj Finance Personal Loan Bangalore 1800 209 4151
Fullerton Finance Personal Loan Bangalore 1800 103 6001

Conclusion

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Read more: All about personal loans

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6 Responses

  1. uae loans says:

    This blog is really nice and full of information.i have learned many things from your blog. Thanks!

  2. Nikunjamin says:

    I Like above blog information about Personal Loan. 

  3. RajanChauhan says:

    wow!!! Seriously it's very good article. All personal loan related information is at one place.  I believe a person should take the personal loan, only in case of emergency. Because one you got the habit of taking the personal loan, then you can't stop yourself. It's just a bigger version of credit card.

  4. Rashi says:

    Very Useful Information, Thank you for sharing, Keep Sharing.  

  5. motoapk thanks says:

    Say, you got a nice article post.Really thank you!

  6. Ella Velasco says:

    I completely agree with your views on personal loans online. I think applying loans online has more benefits than following the paper format. Borrowers can have the convenience of submitting loan applications in few minutes and they can get the funds quite early to their bank accounts.