Personal Loan

What is a Personal Loan

A personal loan is a type of loan which enables you to fulfil your urgent financial needs. Life is uncertain and can bring along situations wherein a need for urgent cash/funds might arise. Availing a personal loan in such a situation is a perfect solution. A personal loan is an unsecured personal loans which does not require any collateral or security.

Who Can Borrow Personal Loan

• Salaried Individuals
• Self-Employed Individual
• Self-Employed Professionals
• Person of Age 21 – 65 yrs.

Features and Benefits of Personal Loan

• Borrow up to Rs.40 lakh, if not more.
• Opt for a loan tenure of up to 5 years and repay your loan in easy installments.
• Minimal paperwork and documentation required.
• No restrictions on how the loan amount can be used.
• Affordable interest rates ranging between 10% p.a. and 24% p.a.
• Helps in consolidation of debts.
• Quick approval.
• Pre-approved loan offers.

Different Types of Personal Loans in India

Usually, a personal loan is not restricted in terms of its utilization. That is, you can use your personal loan for any purpose as long as it is legal. However, there are certain lenders who provide different loan products on the basis of the purpose which is mentioned by the borrower in the personal loan application. On the basis of utilization, these are the different types of personal loans which can be availed in India:

• Personal Loan for Wedding: As the name suggests, a personal loan which is offered particularly for the purpose of meeting the expenses of a wedding is a wedding loan.
• Personal Loan for home Renovation: A home renovation loan is a personal loan which can be availed to meet the expenses of repairing or renovating your home.
• Personal Loan for Vacations: A holiday loan is a personal loan which is especially designed for vacations. You can avail a personal loan for your vacation and pay the expenses on a later date through easy EMIs.
• Personal Loan for Pensioners: A personal loan which is specifically offered to pensioners is known as a pension loan.
• Personal Loan for Consumer Durable: Some lenders offer the consumer durable loan which is exclusively offered for the purpose of purchasing consumer durable goods such as televisions, washing machines, refrigerators, and so on.
• Personal Loan for Festivals: Certain lenders offer a personal loan exclusively for festivals. If you are looking for a loan to make arrangements for a festival, you can apply for a festival loan.
• Personal Loan for a Personal Computer: There are a few lenders which offer a special loan for people who are planning to purchase a new computer. This loan is known as personal computer loan.

Things to do After Closing a Personal Loan?

If you have recently paid off your personal loan (either repaid or foreclosed), you might have the idea that your obligation towards the loan is over. However, that is not the case. There are certain things that you should do after paying off your personal loan.

• The No Dues Certificate or NDC: The No Dues Certificate or NDC is issued by your lender once you pay off the debt. This is one of the most important documents that you should collect immediately after paying off your loan. It is also a wise decision to retain this document for an extended period of time. This certificate validates the repayment that you have made. Without this document you cannot prove that you have paid off your debts. In case you are looking forward to taking another loan in the near future, you will need this document to prove that your previous loan has been paid off. Usually, this document is issued on spot by your lender if you are paying off the final amount through hard cash. If you are paying via check or NEFT or any other means, the lender will issue the NDC and will either send it to your registered address or will ask you to collect it from the branch office of the lender.
• The Statement of Account or SoA: The Statement of Account or SoA, along with the NDC will help you prove that your debts have been completely paid off and have been paid on time. This is an optional document which is often issued by certain lenders. If your lender provides this document, you should consider getting it. However, you should also look for any sorts of discrepancies in the credit score. If you find something wrong, you can use the SoA to make the necessary changes to it.
• Collection of unused cheques: If you have some cheque leaves which have not been used, you should collect those as well. The collection of the No Dues Certificate and the unused cheque leaves, usually, marks the end of the closure process for the loan.
• Check your credit score after closing the loan: This is just a recommendation. It is not compulsory to check the credit score after the closure process ends. However, it is recommended that you check the score to make sure there are no differences in the score. If there are some chances of you availing another loan within 1 to 2 years of the closure of the current loan, it is highly recommended that you check the credit scores right after the closure of the loan.

Other Fees & Charges related to Personal Loan

• Processing fee
• Goods and Services Tax or GST
• Verification charges
• Charges levied for issuing duplicate statement
• Penalty for defaults
• Penalty for pre-payment and part payment of loan