Quick loans to fast-track your dreams or restructure multiple debts.
A personal loan is a short- to medium-term unsecured loan that does not require any collateral or security for disbursal and is extended to salaried class individuals. These loans are generally disbursed in a few hours to a few days with minimal or no paperwork at all. A key feature of personal loans is their flexible end-use. Thus, this unsecured loan can be used to meet a variety of needs, ranging from emergency medical expenses to planned expenditures such as home renovations, weddings, etc.
Know More about PERSONAL LOAN
The following people are eligible to apply for a Personal Loan:
~ Employees of private limited companies, employees from public sector undertakings, including central, state and local bodies
~ Individuals between 21 and 60 years of age
~ Individuals who have had a job for at least 2 years, with a minimum of 1 year with the current employer~
~ Those who earn a minimum of 12,500 net income per month.
The following documents are required to apply for a Personal Loan:
~ Last 3 Month Salary Slips
~ Form 16 Part A and B with Digital Signature.
~ Appointment Letter
~ Sanction Letter of all loans
~ Last 12 months bank statements of all banks.
~ Address proof (Telephone bill or Electricity bill latest, within 60 days)
~ Official/Company ID card
~ 2 personal references (Friends and relatives).
~ KYC – PAN Card, Aadhar Card
~ Photographs of individual
~ Salaried- 10.50% to 32% per annum
Salaried- 2% to 5% one time on the sanctioned loan amount.
The processing fee depends on the credit decision of Financial Institution providing the sanction. At no given point does BazaarMoney / its employees / partners solicit Processing Fee to be paid to our own account. This fee is directly payable to the Financial institution.
The Premature Closure Charges depends on the credit decision of Financial Institution providing the sanction. At no given point does BazaarMoney / its employees / partners solicit Premature Closure Charges to be paid to our own account. This fee is directly payable to the Financial institution.
Premature closure Charges (applicable on principal outstanding) post Cooling Period off / look-up Period.
~ Up-to 24 EMI repayment – 4% of principal outstanding,
~ Post 24 EMI and up to 36 EMI repayment – 3% of principal outstanding,
~ Post 36 EMI repayment – 2% of principal outstanding.
The above are mentioned for Rack Charges. Please read the sanction letter for the actual terms of Charges.
Partial premature payment is allowed post payment of first EMI.
~ Post 01 EMI and up to 24 EMI repayment – 4% of part payment amount.
~ Post 24 EMI and up to 36 EMI repayment – 3% of part payment amount.
~ Post 36 EMI repayment- 2% of part payment amount.
The above are mentioned for Rack Charges. Please read the sanction letter for the actual terms of Charges.
Frequently Asked Questions about PERSONAL LOAN
Personal loans are unsecured credit with flexible end-use that typically have a tenure of 12 months to 60 months. If a shorter tenure is chosen, individual EMI amounts are higher, while a longer tenure results in lower individual EMIs.
~ No Collateral/Security Required: You don’t need to provide any collateral such as house or car to avail a personal loan. The loan is approved only on the basis of your creditworthiness, which depends on your credit score, income, repayment history, employer reputation, etc.
~ Flexible End Use: Unlike a car loan or home loan, personal loans can be used for multiple purposes, such as to meet expenses of a medical emergency, travel, house renovation, debt consolidation, etc.
~ Flexible Tenure: Personal Loans come with flexible tenure usually ranging from 12 months to 60 months.
~ Minimal Documentation: You can apply for a personal loan online and even offline with minimal documentation. Key documents that lenders generally need the applicant to provide include a proof of identity, a proof of address and a proof of income.
~ Quick Disbursal: Personal loan disbursal can happen within a period as short as a few hours, once the application is approved. Turnaround times can also be as short as a few minutes, if you are able to avail a pre-approved loan offer.
~ Flexible Loan Amount: The eligible personal loan amount is based on an individual’s repayment history, monthly income, age, profession, employer reputation and other such factors. Lenders offer personal loans of amount as low as Rs. 10,000 to as high as Rs. 40 lakh.
~ Credit Score: It is a 3-digit number between 300 and 900 which is based on an individual’s financial health and repayment ability. Higher your credit score, higher are the chances of getting a personal loan and being offered a lower rate in interest.
~ Loan Amount: Some lenders charge a higher interest rate if the applicant is borrowing a higher loan amount. This is due to the perceived higher risk of default as a higher loan amount typically translates to a higher EMI payout.
~ Loan Tenure: Some lenders charge a higher or lower interest rest for a longer tenure personal loan as compared to the same loan for a shorter tenure. Such variation typically depends on the bank’s internal criteria.
~ Repayment Capacity: In some cases, personal loan borrowers may be charged a higher rate of interest in case they have high existing debt. This is because a higher fixed obligation typically increases the risk of default by the lender.
~ Maintain a high credit score and clean credit history
~ Ensure you have minimal outstanding debt i.e. credit utilisation ratio of 30% or less
~ Apply for personal loan with a lender with whom you have a prior relationship
~ Opt for a secured personal loan such as loan against shares, NSC, KVP, LIC, etc.
~ While the above tips are a good starting point to get a lower interest pay-out for your loan, a low interest rate is not completely assured as there are multiple factors that impact loan interest rate.
~ Ways to decrease total interest pay-out
~ While it may not be possible to get the lowest rate of interest for your personal loan, there are 3 ways you can decrease the total interest pay-out on your loan:
> Opting for a shorter tenure – Higher individual EMI but lower overall interest payout
>Part pre-payment/foreclosure – Decreases the loan principal thus interest payout is lower
> Opting for a lesser loan amount – Lower loan principal equals lower total interest payout
~ Reducing Balance Method
Method of Calculation : EMIs are calculated only on the principal amount outstanding after each prior payment.
EMI Payout : Individual EMI payouts decrease with each successive EMI payment.
~ Flat Interest Rate Method
Method of Calculation : EMIs are calculated on the original amount borrowed, i.e. the entire loan principal.
EMI Payout : Individual EMI payouts remain unchanged over time.
The verification process for a personal loan involves the following key steps:
Step 1: Once you have submitted your online application we receive your online loan application.
Step 2: Subsequently, OUR representative will call you to verify application details and arrange for pickup of documents required for your loan application.
Step 3: Once the documents have been collected and successfully verified, the personal loan application is approved.
Step 4: Loan is disbursed once the applicant signs the loan agreement.
Once your personal loan application is approved and the loan has been sanctioned, disbursal occurs in one of 2 ways:
Option1. Direct transfer of funds to a savings/current bank account specified by the applicant
Option2. An account payee cheque/ draft sent to the applicant’s mailing address by post
Currently the 1st option is more commonly used as disbursal is quicker and there is no risk of a cheque/draft getting lost in transit by post.
The main factors affecting the disbursal limits of personal loans include the following:
~ Income of the applicant – higher income level tends to increase the disbursal amount
~ Current EMI payable – higher EMI pay-outs typically decrease the disbursal amount
~ Number of dependents – higher number of dependents usually decrease the disbursal amount
The list of factors impacting disbursal limits of personal loans mentioned above is not exhaustive and there may be others that impact the disbursal decision made by lenders.
Timely EMI payments of your personal loan are essential to ensure that you maintain a clean credit history and good credit score. There are multiple ways you can pay your loan EMI:
~ Standing Instructions – You can use NACH mandate to set up standing instructions
~ Autopay – You can use internet banking to set-up autopay for EMI payment
~ Online Transfer – EMI payments can be made online using NEFT, RTGS, IMPS payments
~ Cheque/Draft – Post-dated cheques (PDC) or drafts can also be used to pay your PL EMI
Do keep in mind that the different EMI payment options mentioned above may or may not be available in case of your lender.
If you are finding it difficult to keep up with your monthly loan repayments, you might be able to negotiate a lower EMI by extending your repayment tenure. You should however bear in mind that in this situation, due to the longer tenure, you will end up paying more interest over the loan tenure.
The alternative is to opt for a personal loan balance transfer. In this case, the principal outstanding of your current loan is transferred to a new lender at a lower rate of interest. As a result of the lower interest rate, your individual EMI payments will decrease.
The following are a few specific terms related to personal loans that you must know:
~ Personal Loan for Women: It is a special category of personal loan offered to women by several banks and NBFCs. A preferential rate of interest is applicable in such cases to promote and support female entrepreneurs and working women.
~ Personal Loan for Pensioners: It is offered to senior citizens so that they can meet their retirement needs, medical expenses, or plan a trip without any financial constraint.
~ Pre-approved Personal Loan: This is a special category of personal loans, also known as instant personal loans. These are usually offered to existing customers (account holders/credit card holders) of the bank or NBFC. Instant personal loans are characterized by minimal to no documentation and quick disbursal of the loan amount (generally within a few hours). However, the loan amount sanctioned in such quick personal loan offers depend on the applicant’s profile and cannot be changed.
~ Top-up Loan: This is a personal loan issued to a borrower who already has an unpaid personal loan from the current lender. Top-up personal loans are usually available to select PL customers of the NBFC and they often feature an interest rate similar to that of a standard personal loan.
~ Balance Transfer: Balance transfer is the process by which the principal outstanding of an existing loan is transferred to a new lender offering a lower interest rate. This decreases the overall interest payout over the loan tenure.
~ EMI: Equated monthly instalments (EMI) are the scheduled monthly payments that a borrower needs to pay over the loan tenure to pay off the amount borrowed along with interest accrued.
~ Partial-Prepayment: In case the borrower decided to repay a loan amount that is greater than the monthly EMI pay-out, the extra amount is considered to be a partial-prepayment. Such partial prepayment decreases the outstanding loan principal and in effect reduces the total interest outgo for the loan. In such cases, prepayment penalties and related taxes may be applicable.