Are you looking for a suitable loan to fulfill your significant expenses? A personal loan can solve your fund crunch! As per the RBI, Personal Loans comprise almost 30% of total lending in India as of March 2021. The simplicity of the loan and the ease of availing the facility have made it very popular among borrowers.
You can enjoy simplified personal loans with full online access to your loan amount at low interest rates and minimum documentation. This article covers all you need to know before applying for a personal loan to cover your significant expenses.
What makes Personal Loans so attractive?
The unique and flexible features of Personal Loans make them very attractive. Let’s look at the significant features of a Personal Loan.
- No restriction on usage: This is the most attractive feature of a Personal Loan. There is no restriction on the usage of the funds received by you. You can use it at your convenience and for whichever expense you need. Hence, you can use this to sponsor all your significant expenses! You can cover your costs for marriage, your children’s education, home renovations, medical fees, etc.
- Simple eligibility criteria: To get a personal loan from a bank, you should be employed, and your salary should be more than Rs 25,000. You need to submit your KYC documents (PAN and Aadhar Card), your salary slips for the previous two months, your employee ID, and three months’ bank statements of your salary account. It would help if you were between 21-55 years. You can get a Personal Loan of up to Rs 25 lakh depending on your eligibility.
- Collateral free: The banks do not ask for any collateral security against a Personal Loan. The purpose of this loan is to bridge your fund gap. Hence, the collateral-free nature is one of the most delicate features of this product.
Things you must consider before applying for a Personal Loan
You must consider the following points before selecting the best Personal Loan for you:
- Repayment terms: The tenure can be up to 60 months with monthly EMI payments. You can use a personal loan EMI calculator to know your EMI amount. You can also prepay the loan to reduce your interest expenses.
If you want to meet recurring expenses and don’t want to use all the money at once, Kotak Mahindra bank allows you to withdraw multiple times from your loan account as and when you require. You will be charged interest only on the amount removed from the loan account. So you don’t have to bear the interest on the total loan amount.
- Personal Loan interest rate: The interest rate charged by the bank directly impacts your EMI. The higher the rate of interest, the higher your EMI is. The interest charged is always on a compounded basis. The interest is set on the outstanding loan amount every month at a compounded Personal Loan interest rate. The bank gives you a repayment schedule along with the sanction letter. This contains the interest calculation made by the bank on your loan.
So, personal loans can help you cater to your need for significant expenses, whether one-time or recurring.
