A personal loan can be used for multiple purposes. A personal loan definition means that person can be used for purely personal reasons. You need not have to give any explanation or any justification to anyone for using a personal loan.
What is a Personal Loan
It is a multipurpose versatile loan. There are multiple personal reasons for which the individual would have a need or requirement for a personal loan. Nowadays personal loan can be easily availed with an online application so that the individual need not go and personally meet the lender who gives the personal loan.
These days personal loans are becoming very popular for individuals as they can secure a huge amount of personal funds for personal reasons without any hassles or complications and in a very short period. Many lenders are offering personal loans at a very attractive rate of interest.
Eligibility Criteria to obtain a Personal Loan
The individual needs to be an Indian resident, you need to be part of the lending agency service coverage area, and The age group should be between 21 and 60 years. The individual should be a salaried employee or self-employed. If you are not self-employed which means that if you are a salaried person, then your monthly take-home income must be 18000 or greater. If you are self-employed your monthly. If you use an instant personal loan app then you need to know the documents, you need to provide to secure a personal loan. This can be viewed in the loan app. You need to upload the following details in the app.
Upload proof of address that can be driving license, voter id, or Aadhar card as address proof in the personal loan app
- Upload proof of identity: This can be a pan card or a selfie in the personal loan app
- Upload income statement: Upload net banking statement of statements of the bank for 3 months in the personal loan app
- The individual should be very knowledgeable about the procedures and processes to be followed in the loan application and all the prerequisites and documentation required for obtaining the personal loan.
If you are having an instant personal loan app then you can easily follow 3 steps and complete your application using the app.
You must choose a plan which bank or which lending agent and what rate of interest and what tenure and what amount to obtain the personal loan amount. You need to do your KYC documentation and upload it. You need to digitally sign the application and a form called NACH(National Automated Clearing House). NACH is a centralized payment system governed by the RBI.
Once the personal loan application is approved you will get an SMS and the funds are directly transferred to the bank account. The usage of personal loans is multipurpose. You can use it for planning a dream wedding. Planning for a dream home for home renovation or paying off debts. Some lenders charge a processing fee for personal loans. The processing fees can be reduced if you have a good credit history score.
Personal loans can be either secured or unsecured. With secured personal loans, collateral is needed to borrow money. In unsecured loans, you can borrow money without collateral. Unsecured loans can be obtained from credit unions or online lenders and the rate of interest would be much higher. Banks offer secured loans where you would need to submit collateral if the loan amount is very high, and the bank rates of interest are much lower than that offered by credit unions and online lenders.
You have an EMI calculator to calculate the EMI that you would have to pay for the personal loan amount based on the tenure and the rate of interest. In a personal loan, there is a fixed end date by which you need to clear the personal loan amount. If the individual defaults on a personal loan it can cause huge damage to the credit history of the individual and can deny future loans also. When an individual considers a personal loan he/she needs to have complete knowledge of the dos and don’ts and have a proper plan of action to repay it.
Also read: What Are The Benefits Of Using An Online Income Tax Calculator
