Before you go ahead and opt for a personal loan, you must know what you are getting yourself into. A personal loan is a debt provided by financial institutions and banks to individuals with high credit rating and a stable monthly income. These loans are not guaranteed to any asset serving as collaterals. The personal loan rate of interests are decided on factors like your income, age, nature of your employment, employer details etc. You can easily avail of a personal loan online if you want to purchase something you cannot afford or to tackle a monetary emergency. In addition, this loan can be taken to meet several other financial issues like lack of funds during a wedding, unexpected medical bills, or mortgage repayment.
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With everything made available online, through net banking, you can avail all the banking services from the comfort of your home. Moreover, you can opt for a personal loan hassle free with few simple clicks, but the real struggle lies in managing the EMIs after utilizing the loan amount. So, we would suggest you read this article till the end before investing yourself in a personal loan.
- No Need Of A Collateral
Since a personal loan is an unsecured loan, there is no asset required to be serving as collateral. Unlike a personal loan, assets like property, jewellery etc., can be guaranteed as collateral in secured loans where the lender is authorized to take or seize these assets if the borrower fails to repay. You can get a personal loan based on your credit history, credit score and other such acts of creditworthiness.
- Less Documentation
Instead of heavy documentation, personal loans have certain eligibility criteria that one needs to fulfil. Thus, if you are planning to apply for a personal loan, make sure you are a salaried employee under any government or private organization. Plus, your net monthly income should not be below INR 15000. A stable income is one of the many factors that prove your worthiness to get a personal loan; you also need to have a good credit score, cleared past debts, timely credit card payments, etc., to establish your worth.
- Flexible Loan Tenure
According to your loan repayment capability, you decide the tenure of your personal loan. By opting for a long-tenure loan with lower EMIs, you can reduce the burden on your monthly income. But decide carefully because longer loan tenures can cause you a financial crisis in the future. On the other hand, a short tenure loan costs you higher EMIs but provides you freedom from repayment sooner.
- Interest Rates
A personal loan is given based on creditworthiness, credit score and credit history; therefore, you can calculate your personal loan rate of interest before applying for the amount. It is essential to know these rates as they determine the future EMIs that you will be paying.
In order to get affordable interest rates on personal loans, it would be advisable to compare the personal loan interest rates issued by several banks and financial institutions before going for one.
It Is Better To Be Safe Than Sorry
It is very important to get complete knowledge about personal loans before applying for one. With the current technology and online facilities taking such loans has become easier and faster. Decide the amount you need to borrow carefully after evaluating the interest rate and the EMI. Then accordingly, you can take a personal loan from reputed banks that offer flexible plans and affordable EMIs. One such financial institution is Axis Bank that offers an effortless online banking experience with great personal loan interest rates on amounts that vary from INR 50,000 up to INR 15,00,000.