In India,
now, availing personal loan is an easy task, as the number of lenders provide
personal loan, i.e. banks or financial institutions. Even the person can avail
the personal loan at low interest rate that too with lots of benefits. With
this person can save their credit score getting spoil, as the person can use
these funds for any of their needs or requirements or day to day expenses. Even
the person does not have to give any information regarding availing of the personal loan to the lender. The person can use
this loan for paying off utility bills, medical emergency, higher education,
wedding expenses, paying off debts, purchase of car, jewellery or consumer
durable goods, initiating new business, house renovation etc. The person
requires personal loan as income of the family is low, and prices of everything
are touching sky; due to high inflation. In this scenario, person looks for
outer funds and thinks of arranging funds from relatives or friends, but the
end solution left with the person is of availing personal loan.
The
personal loan in India is usually availed as an unsecured loan. This is so;
person can avail this loan for the meager amount, i.e. Rs.50000 and also for
the higher amount, i.e. Rs.15lacs. Though, the interest rate is low, then also;
it is slightly higher than from other loans. The banks provide this loan at the
interest rate of 14-25%, which entirely depends
on the customer’s profile. Even the bank provides this loan for the shorter
tenure, i.e. 1 to 5 years. This is because; the lending risk is high, as the
bank has no other means for recovery of the loan amount, as if the person
defaults in loan repayment.
Thus, bank
checks the customer profile and creditworthiness of the customer. They check
these things through customer documents. The customer has to submit various
documents with the loan application that are income proof, identity proof,
employment details, age proof, bank statement and residential proof. The bank
verifies these documents and base on these documents the lender decides the
loan amount, tenure and interest rate. The bank sanctions the loan only when
they are satisfied with customer documents. Even they can provide the personal
loan at a discounted rate of interest, if the person has excellent credit worthiness.
Therefore,
the person should check their creditability before availing the personal loan.
