Important Things you should know before applying for Personal Loans

Important Things you should know before applying for Personal Loans
Important Things you should know before applying for Personal Loans

Now a days, personal loans are become common commodity and every financial institutions and NBFCs (Non-Banking Financial Company) are providing personal loans to its customers. Some of them are approaching customers with attractive schemes and marketing gimmick to attract customers. However you should be aware about the complete personal loan product and the liabilities which you are going to be bound before you apply.

  • Personal loans amount for an eligible customers vary from financial institutes to NBFCs, some of them provides loan up to 30 lakh based on Credit Policies and eligibility.
  • Normally the rate of interest will be fixed across tenure of the loan, the terms and conditions of the interest rate would be mentioned in the loan agreement.
  • There will be personal loan processing fees depends upon the relation with the customers, some banks may waive off the charges. Normally 3% of the loan amount is the processing fees and varies between 1% – 3%.
  • The loan tenure will vary from 5 years to 8 years depends on the loan amount and the financial institution.
  • We strongly suggest you to kindly read the loan agreement and ensure that you have understood the key elements like interest rates, loan processing fees, pre-payment charges, loan top-up charges, etc before signing the agreement.
  • Normally customers can prepay the personal loan post 6 months of the loan disbursement , however its vary from bank to bank.
  • By default, interest on your personal loan accumulates and calculated on daily basis, however it is payable as Equated Monthly Instalment (EMI) on the due date
  • Your personal loan EMI can be payed through account debit using Electronic Clearing System (ECS) or by setting up a Standing Instruction (SI) from your bank account, or through Post Dated Cheque (PDC).
  • You should ensure that you pay your EMI on the due date because non payment of EMI on due date will attract penalty and it would impact your credit rating (reporting to Credit Bureau-CIBIL)
  • The bank will inform you by written or electronic mode for any changes in the interest rates and terms and conditions time to time.

Here are the lists of documents which are required for the processing of personal loan by the financial institutions:

  • List of documents required for Salaried professionals :
    • Proof of Identity:- Passport / driving license / voters ID / PAN card /Aadhaar Card
    • Proof of Residence:- Leave and License Agreement / Utility Bill (not more than 3 months old) / Passport (any one).
    • Proof if Income : Latest 3 months Bank Statement (where salary/income is credited) and latest Form 16, Salary slips for last 3 months.
  • List of documents for Self-Employed professionals:
    • Proof of Identity:- Passport / driving license / voters ID / PAN card /Aadhaar Card
    • Proof of Residence:- Leave and License Agreement / Utility Bill (not more than 3 months old) / Passport (any one).Income proof (audited financials for the last two years).
    • Business / Current Account Latest 6 months Bank statement.
    • Office address proof.
    • Proof of residence or office ownership.
    • Latest 2 years ITR along with computation of income, B/S, P&L a/c with all schedules certified by a CA
    • Business continuity proof: Trade license / establishment/sales tax certificate)

 

admin

InCredFinance.com is a cutting edge technology enabled financial services blog focussing on Small and Medium Enterprise Loans (SME Loans), Personal Loans ( Consumer Loans), Home Loans (Housing Loans) and Education Loans ( Study Loans). We strive to provide relevant information about the loans, whom to approach for the loans for your needs, requirements to fulfil the loans etc. InCredFinance.com is an independent blog which provides usefull insights about Small and Medium Enterprise Loans, Personal Loans, Home Loans and Education Loans and have no connections or similarities with any of the financial institutions in India or abroad. The term incredfinance.com came from the thoughts that incredible India needs incredible people, process and finance to build the nation for a stronger and prosper tomorrow. The power of consumer to lend capital from financial institutions for the dream project is the key towards the growth of successful future!

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