Personal loan in your mind, Loan Bazaar is of your kind

A personal loan is an unsecured loan which you take to fund personal expenses. Such as for marriage, education, and even a vacation.

It does not require a ‘Collateral’ and like any other type of loan you need to repay it as per the terms and conditions provided by the lender you choose.

It is possible for you to get a Personal Loan for a maximum tenure of 7 years. While choosing a tenure for a Personal Loan you need to keep the following factors in mind:

1. Loan amount
2. Budget
3. Interest rate

The minimum amount for personal loan will vary depending on the bank. However, most lenders have set the minimum amount at Rs 50,000.

After applying for a personal loan from a bank or NBFC you will need to take the following steps:

1. Application of a loan either digitally online or physically by visiting baking institutions
2. Submission and verification of key documents such as KYC and Financial
3. The lender provides approval of personal loan by issuing sanction letter
4. Finally, the personal loan amount is disbursed by lender

In India depending on your employment status, credit score, and salary you get sanctioned a maximum personal loan amount of about Rs 75 lakh.

The processing fee of a personal loan will vary depending on the bank. However, it is usually charged by most lenders in the range of 0.5% to 2.50% of the loan amount.

While applying for a personal loan it is possible for you to have a co-applicant. It is actually beneficial to get a co-applicant because it helps enhance your eligibility to get a personal loan at the minimum interest rate available. Besides, it also helps you acquire higher loan amounts at better interest rates.

As per under section 80(C) of the Income Tax Act 1961 you can get possible tax benefits when you take a Personal Loan for certain situations. They are as given below

1. Home Renovation
2. Education Cost
3. Business Expansion
4. Property Purchase
5. Buying Gold

The process of personal loan disbursement involves four major steps. They are as follows:

1. Step 1:

   Involves applicant selecting a lender and applying for a Personal Loan at the best interest rate available, which will be determined by the financial institution based on the individual’s ‘Creditworthiness’

2. Step 2:

   Submission of important documents such as KYC and Financial by applicant and verification by the lender

3. Step 3:

   Personal Loan approval via sanction letter provided by the lender

4. Step 4:

   The disbursal of the Personal Loan

When you take a personal loan there are two ways in which you can pay before time. They are as follows:

1. Full payment
2. Part Payment

It is necessary to note that banks cannot prevent you from making prepayments. There is however a charge that you will have to pay.