All You Must Know About the Personal Loans from Banks

A bank usually lends money to a party, individual or partners or married couples for a defined purpose that has been carefully chalked out and the bank knows all about the project or what the loan is for. It can be for various reasons like buying a home, car, bike, plot, farm field, education, health, and many more. However, there is one loan that is a personal loan, which is not defined and is a more flexible loan which the bank offers and can be used for different purposes. It can be for a wedding or a vacation to a foreign country or doing up the interiors of the home or any other reason that can be personal. Today, major banks and various other private finance companies offer personal loans for various purposes which are attractive. You can compare personal loan interest before making a decision without being hasty.

Considering personal loans

Have you ever considered if personal loans are good for you or not. There are advantages as well as drawbacks of applying for personal loans. There is flexibility in obtaining the personal loans, and they are mostly unsecured, and you do not have to provide the security or even a guarantor to the bank or the financial institutions. What's more, there is very little paperwork and documentation as the bank does not need to verify any property or guarantor or other things to secure the loan. Such loans are approved quickly. If you think that it was an easy process, you are wrong. The personal loans are relatively difficult to obtain, and one does not easily qualify criteria as they are stricter as compared to other types of loans. The interest loans are high almost 25 percent, depending on how good your credit profile is.

Determining the amount of personal loan

The loan size depends on the eligibility that the bank has set for the decisive factor. There are other factors like the age, which matters a lot so that they know if you are in the age group where you can repay the personal loan. Even the profession that you are in can be the decisive factor for the bank. The bank will also check your education and how eligible, you are to repay the amount you have taken as a personal loan. The credit profile also speaks a lot about how good you are at repaying the bank loans of any kind. A regular bank will provide around twice the annual income or up to around Rs. 10 lakhs. If you want some more, you can club your spouse's income in order to increase the eligibility of the loan amount. Typically the personal loans can be repaid after 1 to 5 years on a monthly basis with EMIs. Some banks also allow prepayment with a prepayment charge.

Comparing personal loan

You also need to compare personal loan in order to get the best deal that suits you and works out well for you. Use the popular personal loan calculator India that helps to get a better deal in India. The comparison is based on the loan amount and the interest rates which can be compared easily. However, you can also add the tenure and the EMIs which can definitely give you an idea about the benefits. Comparing helps and works to your benefit so that you save a little more. There are some places where you can also bargain and lower the interest rate if you have a good credit record and a good background that helps the financing.

Vaibhav Dhanawade, a passionate writer on finance is closely associated with several financial companies. The writer wrote this article to educate his readers about the various intricacies involved in loan processing.