A personal loan is a 1-5 year unsecured loan given by banks, NBFCs (Non-Banking Finance Companies) or P2P lending platforms without asking for any collateral, guarantor or hypothecation of any assets. The ultimate usage of a personal loan is left to the discretion of the borrower. In our experience, the borrowers generally use a personal loan for debt consolidation, repaying high-cost debt, meeting any family or medical emergency, weddings, vacations, home renovation, rental deposits, business needs for an SME, buying certain assets etc.
Loan eligibility is dependent on primarily the following factors:
The company where you work. Every bank has a list of companies running into thousands which they have categorised into segments like A, B, C etc depending on the credentials and financials of your employer. The higher the category the higher the loan eligibility chances.
Quantum of loans and credit card outstanding that you already have. Typically a bank will not give a loan if the total EMI obligation (including the current personal loan that you are trying to apply for) exceeds 50-75% of your total net take-home salary.
Your gross/net salary
Your credit score is reflected in your CIBIL or Equifax report. Having a good credit score is a necessary but not a sufficient criterion.
Possible Issue : Already running several loans and hence a bank may not be comfortable with your existing leverage levels vis-a-vis your salary level.
If you have a spouse who is also working, you can add her as a co-applicant to boost the combined salary levels or
Try to pay off some of your debt so that your leverage levels can come down or
Do a balance transfer/debt consolidation/re-financing of your existing loans such that the rate of interest on loans can also come down and additional loans can also be provided.
Issues in your credit history as reflected in your CIBIL, and Equifax reports
If the issue is a minor one like some delay in payment of credit card due then we can try your application in some other bank that can possibly take a lenient view on the deviation
If you think that the credit report is erroneous and you have sufficient documentary proof we will represent the case to the bank and try to convince the credit team
If the issue is a major one like write-off, settlement of any past dues etc then it might be difficult to obtain a loan. Certain mitigation factors like if you/your spouse/your parents have their own house in India can give comfort to certain banks to give you a loan.
Most banks have certain internal credit parameters to evaluate a loan which is kept confidential and not shared with us. Several demographic, financial and credit aspects go into these internal evaluations. You might not have met the minimum cut-off for obtaining a loan.
We can re-apply for your loan from one of the other lenders that Shree Consultants is affiliated with.
Pre-closure means that a customer wants to close the entire principal outstanding amount in one go. Whereas part payment means that a customer wants to repay only a certain portion of the outstanding amount. Please ask our advisor for more details on this when your loan is being processed.
Some banks have a lock-in of 6 months to a year while some banks allow you to pre-close even after the 1st EMI has been debited from your bank. There may also be restrictions that you can only use your own funds (and not the balance transfer cheque of another bank) to pre-close a loan. In addition, banks may allow pre-closure at no cost or may levy a pre-closure fee (2-5% of the amount being pre-closed). Please ask for clarifications from our or the bank’s loan advisor on all these factors before signing the loan document.
Some banks like Bajaj Finserv, Axis, Citibank etc allow part payment. However, there can be restrictions on how many times in a year you can part pay and the minimum and maximum amount that you part pay. Again, please ask for clarifications from our or the bank’s loan advisor on all these factors before signing the loan document.
Generally, the minimum amount loan amount is Rs 50,000 and the maximum amount is Rs 30,00,000. Higher loan amounts are dependent on a personal discussion that a bank may want to have with the borrower and then take a call on the loan amount.
The dependent factors are:
One needs to provide identity proof, residence proof, the last 3 months' salary slip, the last 6 months' bank statement and a passport-sized photograph. Banks may also ask for additional documents later like Form 16, appointment letter, company ID card, and previous company relieving letter.
All personal loan repayment happens in the form of an EMI (Equated Monthly Installment) through the customer's bank account. The customer needs to give a few PDCs (Post-dated cheques) and sign an ECS mandate in favour of the bank disbursing the loan.
The bank will levy certain ECS bounce charges/penalties. In addition, it will get reported in your credit report. Depending on the severity of the default it can have a serious impact on your future credit possibilities like a home loan, car loan etc. In addition, the banks can also take legal action against the borrower.
You can avail a loan from INR 15,000 to INR 1,500,000 but this would be based on your income status.
Again depending upon your income and experience the duration would be decided which ranges from 12 to 60 months.
Yes, you can repay a part of the loan prior to the actual date> Axis Bank does not charge any prepayment penalty on Personal Loans.
Foreclosure is only possible if all outstanding payments and charges have been paid in full. Foreclosure would only be allowed post this. Axis Bank does not charge on foreclosure of the loan amounts.
Not necessarily only if you continue to pay the EMIs on time. Kindly update your loan manager about any such change so that the manager can manage your loan better.
Normally the bank would process the application within 30 days from the date of submission of all documents in full.
Certainly, it is a measure of your financial status and your loan history. Maintaining a healthy CIBIL score would ultimately help your application and also the amount of loan you get and also the duration.
It is when the borrower wishes to close that entire outstanding amount of loan in one shot. There is no further monthly EMI or other concerns.
Yes. It's always a good idea to apply jointly with a co-applicant for a personal loan. This helps you to increase your income eligibility and you can also avail of a larger amount of loan.
Loan repayments made in EMIs. This can be paid through ECS. Also, clients can provide standing instructions to banks to debit the right EMI amount each month.
The Turnaround Time (TAT) depends on the customer, the case, the amount and the documentation served by the customer. Also, all positive outcomes of customer profiling are undertaken. The credit managers make sure that it takes 4-5 days for salaried employees and about 7 days for self-employed.
Credit score and credit history both are evaluated while sanctioning a debt consolidation loan. You will get a debt consolidation loan only if you were disciplined in paying EMIs of existing loans.
In most cases, a debt consolidation loan helps to manage loans in a better way. But there are some advantages too. A debt consolidation loan will make you in the lock-in period for 12 months. If you avail of a secured debt consolidation loan, you will have to put a risk on your collateralized asset.
If the borrower has co-signers with them for the personal loan then that co-signer is equally responsible for the repayments and everything regarding that very particular loan. But when it comes to transferring personal loans to someone else it is not possible in any condition.