The financial stress brought on by the pandemic has forced Indians to spend more than they earn. Moreover, the rising inflation is a sign that one would resort to start spending their savings to meet their ends. In such alarming times, we must be careful with financial decisions and be cautious of how and where our money is being spent. There can be financial emergencies during which the need for money may arise in a short notice of time. Personal loan can be the best solution in such cases, provided the user fulfills the criteria for availing the loan.
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What is Personal Loan
Personal loan is an unsecured loan offered to the applicant based on their employment status, repayment capacity, Occupation, Credit score and past repayment history. Usually, loans offered by the banks require the amount sanctioned to be utilized for specific purpose like home construction or vehicle purchase etc. Personal loan has the benefit of enabling the user to utilize the sanctioned amount for any purpose like marriage, education, medical expenses etc.
The process for availing a personal loan is not much different from that of other loans. You apply for the loan, the bank validates your credit history, repayment capacity and sanctions the loan. Actually, the sanctions are much quicker in case of personal loans. There is no collateral required and hence the time taken for collateral verification in case of other loans is saved when you avail a personal loan.
You must pay back the loan in equated monthly installments (EMIs)- EMI or Equated Monthly Instalment is the amount paid by you to the bank on a specific date every month towards the repayment of the loan availed. EMIs are used to pay both interest and principal amount of a loan in a way that over a specific number of years, the loan amount is repaid in full to the bank along with interest. The EMI varies depending on the loan’s term, amount, and interest rate. Personal loans are unsecured loans, which means no security is put up as collateral for the loan.
Recommendations to avail an easy personal Loan
- Determine your needs
Determine your financial commitments and apply for the loan accordingly. Sometimes, the additional amount borrowed can become a burden while repaying the loan amount. Consider the other financial commitments before applying for an easy personal loan. In case there are pre-existing financial commitments, the loan amount sanctioned can be less.
- Eligibility Criteria:
Once you are aware of your needs, you should determine your eligibility.
The criteria for eligibility to apply for a personal loan are:
- Must be individuals who are residents of India.
- Minimum age: 21 Yrs
- Government and private sector employees having a minimum tenure of 6 months.
The eligibility criteria varies according to the policies of the lending institutions. Users can go through the websites of the lending institution and apply accordingly.
- Calculate your monthly installments:
Users can now easily calculate their EMIs through various calculators available online. Karnataka Bank has the EMI calculator accessible to the users in their easy to use “KBL Mobile Plus” application. This way, users can always make sure that they avail the loan within their repayment capability. They can also try different loan tenures while calculating the EMI and then choose the tenure and EMI that best suits their repayment capacity.
Earlier it was difficult to avail a personal loan due to the need of branch visits. However, since the emergence of digital banking, Many banks have introduced lending through online mode. One of such digital product is by Karnataka Bank. Users can apply for an Online personal loan through their website, or just visit the nearest branch to avail the loan in the offline mode.
Personal loans are unsecured loans, so you don’t need to offer collateral to apply for one. This is why obtaining personal loans could be easier for many customers.
The processing of a personal loan is substantially quicker than the processing of other loans like a home loan since there is no collateral and its verification is involved. As a result, Personal loan is the best option for addressing any financial emergency or urgent payment issues.
Flexibility of using the funds
Unlike other loans, there is no usage constraint on funds availed through personal loans. It can be used for multiple purposes like Self or children’s education, Marriage self or dependants, Medical expenses of self or dependants, Obsequies expenses, Repair of own house or Tourism.
Improves Credit Rating
Getting affordable personal loans and making timely repayments is a great strategy to improve your credit score. It is advisable to borrow money depending on your commitment to repay. Failing to repay timely EMI’s could negatively affect your credit score.
Compared to other loans, Personal loans require less documents since there is no producing of the collateral and the documents required for its verification.
Since Personal Loan has multiple benefits such as quick sanction, low-interest rate, minimal processing fees etc, It is a great way to raise funds for financial requirements at a short notice. It is very easy today to approach financial institutions to avail such loans. However, One should compare the offers from different financial institutions and choose the one that suits their need.