As we already know that personal loans are unsecured loans available widely in the financial market. This is an emergency fund pool when in dire need of finances. All categories of individuals including salaried and self-employed can take money to meet the personal expenditure like debt closure, house expenses, wedding expenditure, touring, etc. Personal loans being neutral in nature can be easily used for all purposes They are the quickest way to have money in your bank account with minimum documents and loan collateral. The rate of interest charged on personal loans are higher too. This is owing to the fact that it’s sanctioned without security. There are already too many players in the market offering personal loans.
Salient Features of Taking Personal Loans
No collateral required:
Personal loan is an unsecured loan and can be availed without keeping assets at bay. A personal loan is an unsecured loan and can be availed without keeping any assets (house, appliances, car, etc.) at bay. These personal loans are primarily based on the individual’s credit score, source of income, credit standing, etc.
Flexibility of repayment:
There is an expansive scope of flexibility in the repayment tenure, upto 5 years. This is quite different for credit cards where timely payments is a must!
A personal loan can be used for several important purposes, without pledging assets. It can be used to pay for older debts and reimburse financial deficits in emergencies.
A personal loan does not need any lengthy documentation; it gets approved within 48 hours of uploading the application form. Just procure as much as you like, on the basis of KYC, credit score, income proofs, and background verification too. Personal loans can easily range between Rs. 10,000 to Rs. 40 lacs, depending on the requirement.
READ MORE: Best Personal Loan Providers In India 2019
Fees & Charges:
Many times, we hear about the hidden costs involved in procuring a personal loan. Processing fees, cheque bounce costs, pre-payments fees and many more can be categorized as hidden charges. At most occasions, the terms and conditions clearly mentioned in the documents of a personal loan. Its commonly found that documents are not reviewed by individuals. Later on, the lending companies are blamed for the whopping charges, besides the interest rate. Let us differentiate between what all charges are included in hidden charges. With interest rates, banks also charge the following kinds of personal loans.
A processing fee can easily fall between 2-3% of the principal amount. Infact, this can be much lower if you have bargaining power with the lending institution. Banks also package personal loans in a way that companies agree upon lower or zero processing fees. Most often, financial institutions charge Rs. 999 or 2% of the principal, whichever is higher.
For shorter duration of time, high processing is levied. So, it is imperative to compare the rates and then make a choice.
: A preclosure fee is charged on the closure of your specified term loan. Financial institutions impose a penalty on premature closure of the term loans. A loss is incurred by the bank on the interest rates unpaid for the remaining months. This prepayment penalty can range upto 5% on the loan amount.
LOOKING FOR A INSTANT PERSONAL LOAN? GET UPTO Rs.2 LAKHS, APPLY NOW !
The Reason Why Processing Fee is not Charged by NBFCs:
NBFCs are focusing on making the personal loan application process seamless and quick. Most processes have turned automated and online. Earlier the amount of time and effort was counted as the processing fees.
When an individual wishes for a high loan amount, a higher amount is charged as processing fees. So going forward, an individual prefers a zero processing cost lender. Other charges like prepayment, cheque bounce, and partial closure charges should not be ignored.