A Personal Loan is a sum of money you can borrow to fulfil any sudden or important financial needs, especially during emergencies. There are different kinds of financial institutions like Non-Banking Financial Companies (NBFCs) that provide Personal Loans. You have to repay the borrowed funds over time, with interest. Multiple platforms provide some of the best Personal Loans in India. Let’s learn more about Personal Loans, the features and benefits you can enjoy, and more.
What is a Personal Loan?
A Personal Loan is a type of loan that you can use for various personal purposes, such as paying for medical bills, home renovations, wedding expenses, or debt consolidation. Unlike other loans that are meant for specific purchases, such as car loans or mortgage loans, a Personal Loan gives you more flexibility and freedom in how you spend the money.
Furthermore, a Personal Loan is usually an unsecured loan, which means you don’t have to provide any collateral or security to the lender. While some lenders offer secured Personal Loans, it requires you to pledge an asset, such as your car or savings account, as a guarantee for repayment. These loans may have lower interest rates than unsecured ones, but they also carry the risk of losing your assets if you default on the loan.
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How is Interest Calculated for a Personal Loan?
When it comes to Personal Loans, you will always prefer low-interest Personal Loans. However, the interest rate depends upon several factors, which include the CIBIL score of the individual along with the credit history. Generally, a credit score of 750 and above is a very good score.
Features of the Best Personal Loan in India
The intricate features of availing the best Personal Loan in India are listed below.
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Flexible Repayment Tenure
Availing of a Personal Loan comes with an added feature of flexible repayment tenure. You can pay back the loan at your convenience as the repayment tenure ranges between 12 to 60 months. Moreover, you can also choose the tenure according to your repayment capacity.
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No Foreclosure or Prepayment Charges
You might be cautious about certain hidden charges like prepayment or foreclosure. However, there are no such charges associated with availing yourself of a Personal Loan. You can prepay your loan without having to pay any extra charges.
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Low-Interest Rates
The interest rate is a crucial element that you should consider before taking out a loan. Moreover, if you have a low-interest rate, the EMI amount will also be less.
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No Security/Collateral
A Personal Loan is an unsecured loan which does not require you to pledge any collateral or security. Therefore, you can take out a Personal Loan without having to go through the hassle of pledging an asset.
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Easy Process
The process of applying for a Personal Loan is easy and hassle-free, with minimal documentation. All you have to do is enter a few important details, upload the documents and get your loan approved.
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Multi-purpose
There are no usage restrictions on the usage of the loan. You can take out a Personal Loan and use it for a variety of purposes. It may be to fund your child’s higher education, cover medical emergencies or for wedding expenditures.
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The Process to Get an Unsecured Personal Loan
To get a Personal Loan, you need to apply to a lender, such as an NBFC, bank, credit union, or online lender. The lender will check your credit history, income, and other factors to determine your eligibility and loan terms. The loan terms include the amount you can borrow, the interest rate you have to pay, and the repayment period you have to follow.
Once you get approved for a Personal Loan, the lender will transfer the funds to your bank account. You can then use the money for any legitimate financial need. You have to repay the loan in fixed monthly payments or instalments over the agreed period. The monthly payment amount depends on the loan amount, interest rate, and repayment period. You can use an online calculator to estimate your monthly payment and total interest cost.
Conclusion
Personal Loans have become a popular option for individuals facing financial emergencies or in need of funds for personal expenses. Several platforms provide the best Personal Loans in India. However, before taking out the loan, it is necessary to review your financial stability and make sure that you comply with the eligibility criteria. Moreover, you must maintain a good and solid credit score to get low-interest rates, long repayment tenure, desired loan amount and quick approval. It is also important to carefully assess the terms and benefits provided by each lender to make an informed decision.