As we all know, in today’s times, living a good life costs a lot of capital. Further, there is a huge gap in the amount of income earned and the costs of living; thus, more than often, we barely have any amount of money left to save. And at such times, if we face a sudden financial crisis then it becomes quite difficult to take care of it on our own. However, now there are a lot of banks and NBFCs (non-banking financial companies) that provide financial assistance at a lower personal loan interest rate and flexible repayment tenure. Thus, today in this article, we will be discussing 4 of the most frequently asked questions about personal loans in India:
What does unsecured mean in personal loans?
The term ‘unsecured’ means- loans without any sort of security. The reason why a personal loan is called unsecured is that you don’t have to provide any sort of collateral to make use of them. Further, there are no restrictions on the usage of personal loans; meaning, you can use them in any way you want- as long as it legal. You can use an unsecured form of loan to consolidate your existing debt, take care of your wedding expenses, or fund that last-minute trip of yours.
Where do I apply for personal loans?
The new-age financial institutions have started offering personal loans online; thus, now you can easily apply for financial assistance from the comfort of your home or office. Other than that, you can even choose to apply for a personal loan through traditional offline methods. However, remember to compare the loan products before applying for an unsecured loan. The reason being, interest rates charged by the financial institutions vary from one lender to another and comparison will help you to find the one which suits your needs the best.
How are my interest rates calculated?
Your personal loan interest rate is calculated on the basis of the principal borrowed amount and the repayment tenure opted by you. Further, the financial institutions even provide you with an online EMI calculator to compute your installments for free-of-cost. The other factors that affect your interest rates are your income, job stability, the reputation of your organization, credit score, history, etc. Hence, ensure that you repay all your current and previous debt before applying for personal loans in India.
What all documents do I need for personal loans?
As we have discussed before, a personal loan is unsecured in nature and thus, you don’t need to produce any sort of collateral. However, there are a few documents that you need to submit, and they are here as follows:
- Age and nationality: You need to produce your Aadhaar card, driving license, etc.
- Income source: Last 6 months bank statements, IT returns, 3 months’ salary slips, etc.
- Proof of residence: Your passport, Aadhaar card, etc.
Hope these questions will help you solve all your doubts regarding personal loans in India. Good luck and all the best!