How Does A Personal Loan Work?

• You can apply for a personal loan online, with a bank, or any financial institution.
• The official website of most of the banks and NBFCs have the facility to apply for a personal loan with a single click.
• Your personal loan eligibility is decided based on various factors like your credit score, income, age, employment type, and a few other factors.
• If the financial institution feels that your eligibility criteria are favorable, they will approve your personal loan and disburse the amount into your account.
• Now, the personal loan amount could be disbursed as cash into your account or the lender may provide you with a pre-loaded card that can be used for your purchases.
• Repayments are made through monthly EMIs over the duration of the loan. Most banks do permit part payments and pre-closure of your personal loan.

Features and Benefits of Personal Loans

• Collateral-free loan
• No end-use restriction
• Interest rate starting from 10.25% per annum
• Loan amount of up to Rs.40 Lakhs, which can exceed depending on the lenders' discretion
• Repayment tenure of up to 60 months, which may exceed on case to case basis
• Minimal documentation
• Quick disbursals

Documents For NRIs

• Your passport copy
• Visa copy
• Your official Email ID or the HR’s Email ID
• Bank statements
• Salary certificate or salary slips
• NRO/NRE bank statements of the past 6 months
• Identity proof, income proof, residence proof, and assets.
• Recently taken passport size photographs of yourself and the guarantors

Personal Loan Fees and Charges

The various personal loan fees and charges are as follows:

• Processing fees
• Goods and services tax (GST)
• Verification charges
• Charges levied for issuing duplicate statement
• Penalty for prepayment and part payment of loans
• Penalty for defaults

Uses of Personal Loans

A personal loan has a wide range of uses and can come in handy for meeting either planned or emergency expenditure.

• Debt consolidation from other loans or credit cards
• Creating high value purchases
• When there is a cash crunch
• For meeting sudden business or educational expenses
• Paying for a holiday
• Buying high-end electronic gadgets, household appliances, wedding expenses, emergency medical expenses, home renovations, etc.
• For buying a vehicle if the interest rate on the personal loan is lower compared to vehicle loan.